The SBA has recently proposed to change what defines a company as a small business for 29 industries and one sub-industry. These industries belong to two NAICS categories: “Real Estate and Rental and Leasing” and “Educational Services.” Typically the size for these industries is defined by the total revenue that they generate over the span of three years. Should the amount exceed the current standard then the company no longer qualifies as a small business. The SBA has proposed to increase the amount which qualifies these industries as small businesses due to the changing economy. The current standard was first issued 25 years ago and it has not changed since then, regardless of the ever-changing economy.

By increasing the standard it, would allow for small companies to maintain their small business status while allowing new businesses to qualify and have access to SBA loans. Should this proposal be accepted, it could show to be highly beneficial for the affected industries and also fur the businesses which aid with SBA loans, such as CDCs, banks, and environmental professionals.

Below is a table provided by the SBA’s newsroom posting on this subject. The table displays the two categories and their industries which are proposed to be changed. This proposal is currently posted for commentary on their website.

NAICS Sector 53 – Real Estate and Rental and Leasing:

NAICS codes NAICS Industry titles Current size standard ($ million) Proposed size standard ($ million)
531110 Lessors of Residential Buildings and Dwellings $7.0 $25.5
531120 Lessors of Nonresidential Buildings (except Miniwarehouses) $7.0 $25.5
531190 Lessors of Other Real Estate Property $7.0 $25.5
Except, Leasing of Building Space to Federal Government by Owners $20.5 $35.5
531210 Offices of Real Estate Agents and Brokers $2.0 $7.0
531311 Residential Property Managers $2.0 $7.0
531312 Nonresidential Property Managers $2.0 $7.0
531320 Offices of Real Estate Appraisers $2.0 $7.0
531390 Other Activities Related to Real Estate $2.0 $7.0
532111 Passenger Car Rental $25.5 $35.5
532112 Passenger Car Leasing $25.5 $35.5
532120 Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing $25.5 $35.5
532210 Consumer Electronics and Appliances Rental $7.0 $35.5
532220 Formal Wear and Costume Rental $7.0 $19.0
532230 Video Tape and Disc Rental $7.0 $25.5
532291 Home Health Equipment and Rental $7.0 $30.0
532411 Commercial, Air, Rail, and Water, Transportation Equipment and Rental $7.0 $30.0
532412 Construction, Mining and Forestry Machinery and Equipment Rental and Leasing $12.5 $30.0
532420 Office Machinery and Equipment Rental and Leasing $25.5 $30.0
532490 Other Commercial, and Industrial Machinery and Equipment Rental and Leasing $7.0 $30.0
533110 Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) $7.0 $35.5

NAICS Sector 61 – Educational Services:

NAICS code NAICS industry title Current size standard ($ million) Proposed size standard ($ million)
611110 Elementary and Secondary Schools $7.0 $10.0
611210 Junior Colleges $7.0 $19.0
611310 Colleges, Universities and Professional Schools $7.0 $25.5
611420 Computer Training $7.0 $10.0
611430 Professional and Management Development Training $7.0 $10.0
611519 Other Technical and Trade Schools $7.0 $14.0
611630 Language Schools $7.0 $10.0
611699 All Other Miscellaneous Schools and Instruction $7.0 $10.0
611710 Educational Support Services $7.0 $14.0

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