Is This Really the Definition of 'Small' Business?

Small business: It conjures up images of tiny mom-and-pop shops in a small town. To the U.S. Small Business Administration, it means something much larger. 

For businesses to be eligible for SBA financial assistance and other programs, they must meet certain standards, which are determined by the SBA, to be defined as "small." That could mean how many employees they have, how much revenue they get or other criteria. 

The SBA announced this week that it will adjust small business size standards or inflation, and it will allow about 8,400 additional businesses will become eligible for its financial programs as of July 14.

But as The Washington Post points out, the definition for a small business might raise some eyebrows. The Post cites the SBA's Size Standards Table, which notes that a locksmith could qualify as a small business by pulling in annual revenues of less than $20.5 million, up from $19 million. Other industries would see an increase in the threshold of employees they may have to still qualify as small. 

"In multiple hearings before the House Small Business Committee, the agency has been criticized for what some lawmakers worry is a shift away from helping mom-and-pop businesses to instead support mid-sized firms," according to the article. Read the full report here. 

However, the purposes of the SBA is to help businesses compete in the marketplace, and according to the Post, the SBA says some sectors must compete with billion-dollar corporations and that the standards fit. 

Learn more about the SBA small business standards here. 

Find local assistance programs from the SBA. 

TELL US: Do you think these size standards are fair? How has your business been aided by the Small Business Administration? 

This article is sponsored by Wells Fargo Works. Watch the video series, then enter the contest where you could win a similar experience, including $25,000 for your business. Watch the videos and enter the contest here.