The definition of small business just got bigger, under a new SBA rule effective March 18, 2024. Now the size of businesses that may qualify for SBA 504 or 7(a) loans has been expanded to account for inflation, which also expands eligibility. Businesses that may qualify include those with:
- Tangible net worth not more than $20 million (up from $15 million), and
- Average net income after federal income taxes for the two fiscal years before the SBA application date not more than $6.5 million (up from $5 million)
This is a 34.46% increase to account for inflation, according to the National Association of Development Companies (NADCO). The SBA is also pledging to monitor economic indicators and their impact on size standards and make adjustments for inflation on a five-year schedule.
“This greatly increases the number of businesses that we can assist with our programs,” said Seedcopa + SeedcoDE Managing Director Sherwood Robbins.
Questions? Contact Seedcopa + SeedcoDE for more information.
