Question 1

How do SBA size standards work?

Accepted Answer

SBA size standards are set by NAICS (North American Industry Classification System) code and expressed as either maximum annual receipts or maximum number of employees. 13 CFR Part 121 contains the full size standards table. Most manufacturing and mining industries use employee count (typically 500-1,500 employees). Most service, retail, and construction industries use annual receipts (typically $7M-$47M). You self-certify small business status in federal procurement using the System for Award Management (SAM.gov). SBA can challenge the certification and make a formal size determination.

Question 2

How are annual receipts calculated for size standard purposes?

Accepted Answer

Per 13 CFR § 121.104: annual receipts = total income plus cost of goods sold (for tax purposes — essentially gross revenue). Calculate the average annual receipts for the three most recently completed fiscal years. For businesses in existence less than 3 years, use receipts for all years in existence. Do NOT use projected or current-year receipts — always use completed tax years. Include receipts of all affiliates in the average.

Question 3

What are SBA's affiliation rules and how do they apply?

Accepted Answer

Under 13 CFR § 121.103, SBA may find affiliation if one entity controls or has the power to control another. Control includes: (1) 50%+ stock ownership by an individual, company, or family; (2) common management (same officers or board members); (3) identity of interest between family members; (4) stock options, convertible notes, or warrants that would result in control; (5) contractual relationships that give one party unusual control over the other. All affiliates' receipts and/or employees are combined when determining size. This frequently disqualifies VC-backed startups with common investors across portfolio companies.

Question 4

Are there different size standards for different programs?

Accepted Answer

Yes. The 'primary' SBA size standard applies to most programs. But: (1) SBA loan programs (7(a), 504) use an 'alternative' size standard: tangible net worth under $15M AND average net income after taxes under $5M for the past 2 years. (2) SBIR/STTR uses the 500-employee standard universally (not revenue-based) regardless of NAICS code. (3) Some SBA programs have program-specific size definitions. This calculator covers the primary SBA size standards by NAICS code; for SBA loan programs, consult the alternative standard.

Question 5

How do I find the right NAICS code for my business?

Accepted Answer

NAICS.com and the Census Bureau's NAICS lookup tool (census.gov/naics) allow searching by keyword or browsing the hierarchy. Your primary NAICS code should reflect your largest revenue-generating activity. For government contracting and grant purposes, you self-select your NAICS code — but federal agencies can challenge the selection if it doesn't match your actual primary activity. When multiple NAICS codes could apply, choose the one that best represents the work in the specific contract or grant opportunity.

Question 6

What happens if I grow beyond the size standard?

Accepted Answer

Once you exceed the size standard, you are no longer a small business for new certifications. For existing set-aside contracts: the 'ostensible subcontractor' rule and other limitations apply. For existing SBA certifications (8(a), HUBZone, WOSB): you have a grace period to transition. You must immediately update your SAM.gov profile if your size classification changes. Misrepresenting small business status after exceeding the standard is a violation of the False Claims Act (31 USC § 3729) — civil penalties up to 3x damages plus $27,000+ per claim.

SBA Size Standard Eligibility Calculator

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