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SBA makes 17,000 more businesses eligible for assistance

June 25, 2013|By Adolfo Flores
  • Janet Lee, left, and her sister Kay make dental crowns and bridges at Polar Esthetics, their lab in Encino. They received three small loans through this SBA, which has helped support their business.
Janet Lee, left, and her sister Kay make dental crowns and bridges at Polar… (Kirk McKoy / Los Angeles…)

The federal government is making 17,000 more employers eligible for assistance from the Small Business Administration.

The SBA enabled the expansion by changing the size standards for 70 industries. As a result of the changes, which go into effect in July, more firms will be eligible for SBA loans and grants and will be added to the agency’s database for government contracts.

Several markets, such as amusement parks, saw their revenue size standards rise to $35.5 million from $7 million. Casinos, not including those in hotels, went to $25.5 million from $7 million.

Some industry standards had not been updated for decades, said Kenneth Dodds, director of government contracts at the SBA.

“We want the size standards we’re going to use for purposes of eligibility for government contracts and loans to be accurate,” Dodds said.

Under Congress’ direction, the SBA now has to analyze its standards every five years. The agency used 2007 economic data and public comments to adjust the standards. The next round of information, from 2012, won’t be available for years.

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The move could increase the competition between small businesses and larger ones, Dodds said.

Firms that are just above the standards complain that they can't compete with billion-dollar companies but say that being eligible for SBA financing could help them, Dodds said.

In reality a small business with one to two employees isn’t going to compete for a multimillion-dollar contract, he said.

“A mom and pop is not in a position to compete for a federal contract. They’re not far along in their growth cycle,” said David Eads, executive vice president and chief operating officer of the Los Angeles Area Chamber of Commerce.

About 70% of the chamber’s members are small businesses, and two of their top concerns are access to capital and the ability to generate new business from government contracts.

“The new guidelines opens up more small businesses to apply for SBA financing,” Eads said. “Small business was hit the hardest during the recession. Anything we can do to help them grow and increase employment is good.”


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