SBA proposes new size standards to add 110,000 firms to small-business pool

The Small Business Administration announced a rule change that would broaden its definition of “small business,” potentially qualifying an additional 110,000 companies for SBA loans and set-aside federal contracts.

The U.S. Small Business Administration is set to revise its “size standards,” a move that could add an estimated 110,000 firms to the nation’s 36.2 million small-business count, a rise of about 0.3%. Under the draft rule, thresholds for employee counts and annual receipts would increase for sectors like semiconductors, shipbuilding, oil exploration and animal production, making more companies eligible for SBA loans and reserved federal contracts.

A parallel initiative would eliminate roughly two-thirds of NAICS codes, consolidating over 1,000 designations into 338 broader categories and, in some cases, shortening code lengths. SBA Administrator Kelly Loeffler highlighted the goal of lowering compliance costs and expanding access to financing and contracting. SMB Law Group founder Eric Pacifici said the adjustment will be significant for the 110,000 newly covered firms but will not dramatically alter conditions for the majority of small businesses.

He also noted that the change could allow existing small-business contractors to grow beyond previous caps without losing eligibility. The rule, first proposed in August 2025, must undergo a public comment phase and receive approval from other federal agencies, with the SBA aiming for it to take effect by the end of the year.