The SBA Changes “Number of Employees” Calculation Factors for Multiple Programs

The U.S. Small Business Administration (SBA) is adopting a 24-month average to calculate a business concern’s number of employees for eligibility purposes in all of SBA’s programs – the change becoming effective, July, 6, 2022. Additionally, the SBA is also permitting its Business Loan, Disaster Loan, Surety Bond, and Small Business Investment Company (SBIC) programs to utilize a five-year averaging period (in addition to the existing three-year averaging period), for the purposes of calculating average annual receipts. These changes will allow “larger, small businesses” to retain their small business size status longer – as well as providing some mid-sized businesses the opportunity to regain small business status.

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The information contained in this article is intended for educational purposes and to provide a general understanding of regulatory events, legislative changes and the law – not to provide specific legal advice. Employers are advised to discuss and/or receive counsel from their licensed legal or accounting professional, prior to implementing any new policy or policy change.