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What is the definition of a small business according to the SBA?



SBA has size standards defined for all types of industries to decide whether or not a business can be considered for any of the SBA programs reserved for small business concerns. The majority of these size standards are expressed either in maximum annual receipts (sales) in millions of dollars or number of employees. The various programs within the SBA then also have their own size requirements.



At a high-level, the definition of a small business is as follows:

  • The business must be independent – a subsidiary is not considered independent
  • The business should not be dominant within its industry – there should be many sellers and the business’ decisions will not affect the market
  • Generally, a business with 500 or less employees is considered small (but varies with the industry)
  • Most businesses in the retail and service industries with annual sales of $6M
  • Most businesses in the general and heavy construction industries with annual sales of $27.5M
  • Special trade contractors with annual sales of $11.5M
  • Most businesses in the agriculture, forestry, hunting and fishing industries with annual sales of $.75M