Effective July 22, 2013, the United States Small Business Association (SBA) is increasing the amount of revenue a company can earn and still qualify as a small business. Currently, the SBA defines a small business as one with revenues less than $7 million and fewer than 500 employees. Starting on July 22, changes to that definition will occur in four North American Industry Classification System (NAIC) sectors, in industries that include arts and entertainment, agriculture and forestry, recreation, finance, and management. Sports teams will now be capped at $35 million, an increase from $7 million. Theater companies will increase to $19 million, also up from $7 million. Commercial banks, formerly capped at $175 million, will now be able to have assets of $500 million and still be considered “small.”
The SBA estimates that the revision will affect nearly 18,000 individual businesses. This change will allow a greater number of companies to benefit from government programs aimed at boosting the position of small businesses in the marketplace.
The Private Equity Practice Group at McGuireWoods LLP is dedicated to keeping clients advised of new legislative and business developments as they occur. If you have any questions regarding these issues, please feel free to contact Mark A. Kromkowski (312.849.8170), Bryan P. Bylica (312.750.3617), your primary attorney at McGuireWoods LLP, or any of the authors.