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See the full story · 3 sourcesThe Small Business Administration is proposing a rule that would massively increase the cap at which companies are considered ‘small’ – with some allowed to make over $1 billion
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The Trump administration wants to change what it means to be a small business by raising the standard, allowing certain companies with more than 3,000 employees and making $1 billion to apply for federal loans and grants.
Under a new rule proposal , the Small Business Administration would massively increase the current limit on how much a business may earn or how many people it may employ to be considered “small” – as part of a goal to “reward” growing firms.
In the financial sector, businesses handling “miscellaneous financial investment activities” could make up to $1.011 billion to still be considered small – rather than the current standard, which is capped at $47 million in revenue.
Political organizations making $632 million would be permitted to seek loans and grants – a nearly 200 percent increase from its current cap at $14 million.
While some welcome the change, believing the current standard limits growing businesses, others have expressed concern that the proposal would harm actual small businesses.
“The Trump admin is turning the Small Business Administration into the Big Business Administration,” Senator Ed Markey said in an X post, first reported by the New York Times .
“This rule would decimate opportunities for actual small businesses by opening the door to federal resources for billion-dollar companies. This admin must end its war on Main Street,” Markey added.
Eric Crusius, a procurement lawyer at Hunton Andrews Kurth, told Federal News Network that the proposed changes are a “shock to the system.”
“How do those $10 million or $30 million or even $50 million companies compete with $300 million or $400 million companies?” Crusius asked. “These changes make being small not as special as it used to be now that nearly everyone will be considered small.”
Crusius suggested that, if the proposal were to be made permanent, it could make owning a small business less valuable.
The Independent has asked the Small Business Administration for comment.
A spokesperson for the Small Business Administration defended the change, telling the New York Times that the changes “would reward growth, strength domestic production and rebuild key supply chains – which is essential to restoring American industrial dominance and national security.”
Small business status unlocks various benefits from the federal government, such as contracting.
While many businesses have advocated for the government to update the threshold for what’s considered “small,” the proposed change appears to be larger than anticipated.
Sam Le, a former Small Business Administration official, told the New York Times that the proposal was “the biggest size standard changes in history, no question.”
The proposal suggests staggering increases for businesses such as casinos, which would go from a cap on $34 million in revenue to $774 million; or public relations businesses, which would go from a cap on $19 million in revenue to $543 million.
Consulting firms specializing in marketing would go from a cap of $19 million in receipts to $295 million.
Commercial banking businesses would be permitted to hold $5.03 billion in assets – a massive jump from the current cap of $850 million in assets.
The change is only a proposal for now, and members of the public can provide feedback through the public comment system through Setpember 21.
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