How Does the SBA Define a Small Business?
Due to its mission, the SBA only guarantees loans to small businesses— but what is a “small business”? Well, according to the SBA, a small businesses have a maximum of anywhere between 250 and 1500 employees— all depending on the specific industry the business is in. Additionally, businesses have revenue limits that they must not exceed if they want to qualify for SBA financing. In general, companies with more than 1500 employees are not eligible for SBA loans.
Sample SBA Size Limits for Specific Industries
Below, we’ve provided the SBA’s size limits for a few major industries:
Finance and Insurance: No more than 1,500 employees, and no more than $32.5 million to $38.5 million in average annual receipts.
Construction: No more than $36.5 million in average annual receipts.
Retail Businesses: Depending on the exact niche, businesses may be limited by $7.5 million in average annual receipts, while other types of retail businesses are limited by 100 to 500 employee maximums.
Scientific, Professional, and Technical Services: No more than $7.5 million to $20.5 million in average annual receipts, or a maximum of 1,000 to 1,500 employees.
Manufacturing: Between 500 to 1,500 maximum employees, depending on specific sub-industry.
Health Care/Social Assistance: No more than, $7.5 million to $38.5 million in average annual receipts, depending on specific sub-industry.
Information: 500 to 1,500 maximum employees and maximum $7.5 million to $38.5 million, depending on the specific sub-industry/niche.
It’s important to keep in mind that the SBA has specific size standards for hundreds of industry niches, which can all be found on the SBA’s table of size standards. For example, in the manufacturing industry, chocolate production has a maximum employee limit of 1,250, while dog and cat food production has a maximum employee limit of 1,000. In comparison, roasted nut and peanut butter manufacturing has a maximum cap of only 750— so it pays to know the exact limits for the business you’re in.