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SBA Issues Proposed Rule Re: Small Business Runway Extension Act



The Small Business Administration (SBA) recently issued a much-anticipated proposed rule “to modify its method for calculating annual average receipts used to prescribe size standards for small businesses.” Specifically, consistent with the Small Business Runway Extension Act of 2018—about which we have reported extensively in previous blog posts in January 2019 and December 2018 twice—the SBA “proposes to change its regulations on the calculation of annual average receipts for all recipients-based SBA size standards and other agencies’ proposed size standards for service-industry firms from a 3-year averaging period to a 5-year averaging period.”

The proposed rule—which changes the relevant language in 13 C.F.R. §§ 121.104 and 121.903—does not provide a date by which the final rule will be issued. The proposed rule does, however, request comments from “interested parties” on:

  • “[W]hether [the SBA] should use a 5-year annual receipts average for businesses in services industries only and continue using a 3-year annual average for other businesses”; and
  • “[H]ow the use of annual average receipts over 5 years instead of 3 years would impact both smaller small businesses and more advanced, larger small businesses in terms of getting access to Federal opportunities for small businesses.”

The proposed rule states that such comments must be received by the SBA “on or before August 23, 2019.”

If you have any questions about the SBA’s proposed rule or any related issues, please feel free to contact Aron Beezley.

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