Small Business?

by: Sharon McNeal

Are you a small business? Depends on your business and whom you ask.

What’s all the fuss about?

The obfuscation is about politics and money. Small businesses are eligible for small business loans from the Small Business Administration (SBA). Small business loans are big business! Intensive lobbying occurred when the SBA changed its criteria recently.

Let’s explore the definition by starting with a description of loan eligibility.

Micro business

Micro businesses are eligible for micro business loans. The micro-loans range from $500 to $35,000. Micro loans few collateral requirements. Local non-profits use a peer group model to grant loans. SBA 7(m) loans are <$50,000 and require more collateral than the peer-group loans. The micro business profile is

  • operating independently,
  • 1-10 employees and
  • sales < $250,000/year.

This is the largest business group. It includes

  • independent contractors
  • free agents
  • solo-preneurs (the only person is the owner)
  • small shops, “mom” and “pop” stores
  • alter-preneurs (people who leave corporate to own a business)

Small business

The largest source of SBA money is asset-based loans ranging from $250,000 to $2,000,000 to acquire property, build inventory, lease-hold improvements, refinancing debt or working capital. Administration is through local approved banks and non-profits.

The SBA issued eligibility standards based on sales or number of employees. Standards vary by industry. See the Guide to Size Standards for the full list. Sales below are in $ millions.

  • Sector 441110, New car dealers: sales are < $26.5
  • Sector 443110, Household appliance dealers: sales are < $8
  • Sector 445110, Supermarkets: sales < $25
  • Sector 445210, Meat markets: sales < $6.5
  • Sector 448140, Family clothing stores: sales < $8
  • Sector 511110, Newspaper publishers: < 500 employees
  • Sector 516110, Internet publishers: < 500 employees
  • Sector 518210, Data processing, hosting and related services: < $23
  • Sector 522110, Commercial banking: < $165 in assets
  • Sector 541110, Lawyers: < $6.5
  • Sector 541211, Offices of Certified Public Accountants: < $7.5
  • Sector 541430, Graphic design services: < $6.5
  • Sector 541419, IT value-added resellers: < 150 employees
  • Sector 541163, Marketing consulting services: < $6.5
  • Sector 621210, Offices of dentists: < $6.5

Learn more about your business (and your competitor’s business) by visiting www.Biz4theRestofUs.com and see your business from a different perspective.

The author

Sharon McNeal, owner of Biz 4 the Rest of Us, helps small businesses keep their doors open. Attend one of Sharon’s Small Business Survivor distance seminars on planning/growing a business, running it better or understanding your finances. These seminars explore the business issues behind article and newsletter case studies. For details, visit www.Biz4theRestofUs.com or send request for a new topic to info@Biz4theRestofUs.com .

Visit our web site at www.Biz4theRestofUs.com and sign up for The Small Business Survivor newsletter.

Copyright 2010 You may re-print the above information in its entirety in your publication or newsletter. For permission, please email your request for “reprint” to info@Biz4theRestofUs.com