It’s an election year so I greet news of small business help with the appropriate hyper-vigilance. The children are busy again — how much is this HELP going to cost me?
Let’s start at the beginning. The general rule of thumb is that a small business is a business that has no more than 500 employees. That would be 96% of all employer establishments according to the latest information on the Internet. Although the numbers are stale (the 2007 census), they are stable — I’ve watched these numbers for the last 8 years.
Of course, it’s good for the children. HELP is good because it HELPS a lot of voters.
The real definition of ‘small business’ is any business that can get an SBA loan. The new job act increased the eligibility requirements by raising the maximum annual sales and capitalization limits for ‘small businesses’. The rules aren’t simple: different types of businesses have different upper limits. A recent Wall Street Journal article summarized the changes and gave several examples. Architectural firms making up to $4.5 million were eligible for loans before, now the upper limit is $7 million. Private companies having up to 500 investors were eligible, now the limit is 2,000 investors.
17% of small businesses make less than $100,000/year. 43% make between $100,000 and $1 million/year. 17% make between $1 and $7.5 million.
Now, a medium-sized business is ‘small business’ so almost 78% of all businesses eligible for ‘small business’ loans. Did they raise the size of the loan pool? Humm, must have missed it? OK, terrific, now we are competing with the bigger guys for the same amount of money!
Thanks soooo much!
