Learn more here. Linked here and pasted below is the text from the official question and answer document published by the Department of the Treasury on April 10, 2020, which you should reference: This option does not apply to … It is not an official legal edition of the Federal About the Federal Register regulatory information on FederalRegister.gov with the objective of This PDF is 636(b)(2). This prototype edition of the establishing the XML-based Federal Register as an ACFR-sanctioned However, as explained elsewhere in this rule, SBA is not adjusting either (1) the tangible net worth and net income-based alternative size standard established under the Jobs Act for its 7(a) and 504 Loan Programs; or (2) the tangible net worth and net income-based alternative size standard established for the Small Business Investment Company (SBIC) Program. This repetition of headings to form internal navigation links 15 U.S.C. Typically, the SBA reviews size standards about every five years, in part to adjust for the impact of inflation on a company's annual revenue and other metrics. 2. These size standards are established by 6-digit North American Industry Classification System (NAICS) industry, typically based either on average annual receipts or on average number of employees. SBA also invites suggestions on sources of relevant data and information that SBA should evaluate in developing a permanent alternative size standard and assessing its impact. The new standards come soon after SBA issued a proposal to allow small businesses to calculate their average receipts—for size-standard purposes—over five years, … determine SBA program eligibility: industry-specific size standards and alternative size standards based on the applicant’s maximum tangible net worth and average net income after federal taxes. Small Business Size Standards; Temporary Alternative Size Standards for 7(a) Business Loan Program, 20577-20580 [E9-10359] Download as PDF Federal Register / Vol. SBA is seeking public input to assist in establishing a permanent alternative size standard for its 7(a) and 504 Loan Programs. Under the alternative size standard, a business is eligible for an SBA loan if the maximum tangible net worth of the business is not more than $ 15 million; and the average net income after Federal income taxes (excluding any carry-over losses) of the business for the 2 full fiscal years before the date of the application is not more than $5 million. Size standards are established by the SBA’s Administrator. If you are using public inspection listings for legal research, you In determining the concern's size, SBA counts the receipts, employees , or the alternate size standard (if applicable) of the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for … The Small Business Jobs Act has already made many more businesses eligible for SBA loans because it allowed lenders to use an alternative size standard when determining whether a business is eligible for an SBA loan. This alternative standard comes from the 2010 Small Business Jobs Act (Jobs Act), for which the SBA has never finalized implementing regulations, even after 10 years. The Information Notice further stated that the new statutory alternative size standard would remain in effect until such time as SBA established a permanent alternative size standard for the Business Loan Programs through rulemaking. Federal Register issue. This was expected and comes straight from the text of the CARES Act and SBA regulations. Alternative Size Standard. This information is not part of the official Federal Register document. Additionally, a business can qualify as a small business concern if it meets both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business does not exceed $15 million; and (2) the average net income after federal income taxes of the business for the two full fiscal years before the date of the applicant does not exceed $5 million. 12/29/2020, 864 1. Data on tangible net worth and average net income for the impacted businesses, if available from other sources, may reveal additional insights into the results of SBA's analysis of FY 2015-2017 loan data. Size standards vary by industry, and are generally based on the number of employees or the amount of annual receipts the business has. Under the “alternative size standard”, if a business can show that its (i) maximum tangible net 2018-05787 Filed 3-21-18; 8:45 am], updated on 4:15 PM on Monday, December 28, 2020, updated on 8:45 AM on Tuesday, December 29, 2020. SBA also invites suggestions on sources of relevant data and information that SBA should evaluate in developing a permanent alternative size standard and assessing its impact. 12/29/2020, 392 For NAICS Sector 31-33, ManufacturingThe United States Small Business Administration (SBA) has issued a final rule to do the following: 1. The Treasury Department's guidance is amended and expanded daily or more, and we will continue to provide updates as they become available. Click here to read more about how we use cookies. You may submit comments, identified by RIN 3245-AG16 by one of the following methods: (1) Federal eRulemaking Portal: www.regulations.gov, following the instructions for submitting comments; or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third Street SW, Mail Code 6530, Washington, DC 20416. Law Firms: Be Strategic In Your COVID-19 Guidance... [GUIDANCE] On COVID-19 and Business Continuity Plans. The SBA connects entrepreneurs with lenders and funding to help them plan, start and grow their business. The President of the United States communicates information on holidays, commemorations, special observances, trade, and policy through Proclamations. Under the “alternative size standard”, if a business can show that its (i) maximum tangible net This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. Copyright © var today = new Date(); var yyyy = today.getFullYear();document.write(yyyy + " "); JD Supra, LLC. The new alternative size standard will remain in effect until SBA establishes a permanent alternative size standard for the 7(a) and 504 loan programs. 74, No. The Jobs Act also established for applicants for the SBA's Business Loan Programs a temporary alternative size standard of not more than $15 million in tangible net worth and of not more than $5 million in the average net income after Federal income taxes (excluding any carry-over losses) of the applicant for the 2 full fiscal years before the date of the application (referred to as “Interim Rule”), … 632(a)(5). documents in the last year, by the Nuclear Regulatory Commission DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. EPA is now publishing a supplemental analysis of alternative small business size standard definitions and their effect on the TSCA user fee collection. on Be sure to leave feedback using the 'Feedback' button on the bottom right of each page! L. 111-240). the Federal Register. Since the Agency's electronic systems only include data regarding the number of employees and the NAICS industry for loan applicants, but not data regarding average annual receipts, tangible net worth or average net income, SBA is not easily able to calculate the exact number of businesses that qualified under the temporary statutory alternative size standard that otherwise could not have qualified under their industry based size standards. electronic version on GPO’s govinfo.gov. developer tools pages. Furthermore, while SBA collects and maintains limited relevant electronic data on applicants for its Business Loan Programs (such as the number of employees for each loan recipient, but not average annual receipts, tangible net worth, or average net income), SBA's electronic internal data does not show whether an applicant for its Business Loan Programs was determined to be eligible under its industry based size standard or under the alternative size standard. Many issues have arisen related to the Small Business Administration's (SBA) "affiliation rules" for determination of whether a small business is eligible for a loan under the Paycheck Protection Program (PPP), which is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). edition of the Federal Register. A review of SBA's internal data on its Business Loan Programs shows that the temporary statutory alternative size standard may have enabled some small businesses that were not otherwise eligible under their industry based size standards to receive 7(a) or 504 Loans (“Business Loans”). As a result, any business is eligible for a PPP Loan if it meets the criteria on any one of the following size standards: The CARES Act provides a 500 employee size standard, which a business may use regardless of whether the applicant qualifies as a small business under SBA’s two existing size standards. The SBA's table of small business size standards helps small businesses assess their business size. on NARA's archives.gov. Increase small business size standards for 209 industries in NAICS Sector 31-33, Manufacturing. EPA’s proposal included a small business size standard to qualify a user for a reduced fee amount. better and aid in comparing the online edition to the print edition. documents in the last year, 308 This feature is not available for this document. Although the guidance is a good reminder of the alternative size standard, the guidance leaves open questions on how other SBA concepts, such as business affiliation, apply to businesses when attempting to qualify under the alternative size standard. Alternative Size Standard The “alternative size standard” originally promulgated in 2010 pursuant to the Small Business Jobs Act may also be used to determine if a borrower can qualify for SBA loans. The Jobs Act also established for applicants for the SBA's Business Loan Programs a temporary alternative size standard of not more than $15 million in tangible net worth and of not more than $5 million in the average net income after Federal income taxes (excluding any carry-over losses) of the applicant for the 2 full fiscal years before the date of the application (referred to as “Interim Rule”), and it provided that this temporary statutory alternative size standard would remain in effect until such time as SBA established a new alternative size standard for the Business Loan Programs through rulemaking. the official SGML-based PDF version on govinfo.gov, those relying on it for 15 U.S.C. 1503 & 1507. [FR Doc. 2. SBA now states that an employer will qualify for PPP if it meets both of the following tests: Employer’s maximum tangible net worth on March 27, 2020, is not more than $15 million; and Under the PPP Loan, the SBA considers a business “small” if it meets the one of the criteria based on three different measurements for size standards: 1) employee-based measurement; 2) revenue-based measurement; or 3) alternative-based measurement. Only official editions of the This document has been published in the Federal Register. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day. Register documents. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. SBA will post all comments to this ANPRM on www.regulations.gov. RIN 3245-AG16 Small Business Size Standards; Alternative Size Standard for 7(a), 504, and Disaster Loan Programs; Federal Register Vol. CLICK TO DOWNLOAD Aug 2019 Version. This table of contents is a navigational tool, processed from the has no substantive legal effect. on FederalRegister.gov The Small Business Jobs Act has already made many more businesses eligible for SBA loans because it allowed lenders to use an alternative size standard when determining whether a business is eligible for an SBA loan. The Information Notice also stated that SBA's disaster loan program, surety bond guarantee program, small business investment company program, and small business development and contracting programs, as well as other federal programs utilizing SBA's industry based size standards were not affected by the temporary statutory alternative size standard, and the current standards for those programs in 13 CFR part 121 remained in effect. Conversely, if the loan recipient's number of employees was equal to or less than the industry based size standard, it was deemed for the purposes of this analysis that the loan could have been approved under the industry based size standard. It is also worth mentioning that the guidance appears to set up two conflicting measuring periods for the alternative size standard, as of March 27, 2020, or the date of application. documents in the last year, by the International Trade Administration Furthermore, while SBA has approximated the percentage of all loan approvals issued to small businesses that qualified only under the Interim Rule, it is not possible to determine the precise impact because the available electronic data lacks tangible net worth and average net income data for the impacted population of small businesses.

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