Effective November 5, 2010, the criteria defining what constitutes a Small Business will change. The criteria will be expanded to include companies with less than 200 employees. Also, the annual receipt cap has been increased to $35,500,000.
The SBA predicts this easy rule change will add about 20,000 additional companies eligible for SBA loans. This will also help these companies with Federal contracts.
It is estimated that small business create about 65% of all new jobs (not this recession, however) and employ 50% of the private-sector workforce.
So why redefine the criteria defining a small business. Politics!
Do you consider revenue of $35,500,000 per year a SMALL business? Since banks are not lending money, the SBA wants to widen the net and show that the federal government will loan money!
Why would a small business of this size seek government money --- to expand and hire more workers or have better access and improve their ability to win federal contracts?
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