- Key takeaway: At least one financial services trade group, Americas Credit Unions, has declared its support for increasing the size standard that helps define small businesses.
- Forward Look: The SBA has extended the comment period on the proposed change to Nov. 20.
- Supporting data: The agency has already received more than 3,000 comment letters.
Businesses, lawmakers and trade groups have plenty to say about the Small Business Administration's plan to make larger-sized businesses eligible for its lending programs.
The agency has received more than 3,000 written submissions, and with thousands of additional parties seeking a chance to weigh in, it has moved to extend its comment period, which had closed Monday, by 60 days.
The rule change would consolidate approximately 1,000 existing industry-specific classifications into 338 broader standards, which allow a greater number of sizable concerns to qualify for federal contracts and SBA loans.
The SBA estimates about 114,000 larger companies would meet the small-business definition under the revised rule.
While most of the small businesses that have commented on the proposal are opposed to it, lenders and trade groups representing them are taking a more favorable view.
America's Credit Unions, the largest credit-union trade group, declared its support for the revised standards in a Sept. 21 letter, arguing that the proposal would expand lending opportunities available to its member credit unions. That, in turn, could entice more credit unions to make SBA loans.
"America's Credit Unions has long encouraged SBA to identify ways to expand participation in its lending programs," wrote Tyler Maron, regulatory advocacy counsel at the trade group.
In an unsigned letter, a banker at the $28.5 billion-asset Ameris Bancorp in Atlanta characterized the proposal's broader parameters as examples of both regulatory relief and economic realism.
"Everything costs significantly more nowadays, therefore increasing the size standards of small businesses makes perfect sense," the Ameris banker wrote.
A spokesperson for the Independent Community Bankers of America said Thursday that the group "has not taken a position on the SBA proposal at this juncture."
Trade groups representing small businesses have been much more outspoken. In a Sept. 17 letter, the National Federation of Independent Business urged the SBA to "proceed carefully with revisions to size standards."
"The average NFIB member owns a small business with about eight employees and operates without dedicated departments for legal compliance and regulatory affairs," wrote Elizabeth Milito, executive director of NFIB's Small Business Legal Center. "These small businesses face challenges that differ significantly from those of businesses with hundreds or even thousands of employees. Although both may be considered 'small' under SBA standards, their resources and ability to compete for federal opportunities vary significantly."
That theme — that small and startup businesses are threatened by the agency's proposed size-standard revisions — was repeated by dozens of individual commenters.
In a Sept. 22 letter, Patricia Hussey, the founder of Georgetown Policy Partners, a Washington, D.C.-based healthcare consulting firm, wrote that the proposed rule "risks preserving the label of small-business protection while weakening its practical value for the businesses that need that pathway most."
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Meanwhile, Democratic lawmakers are urging SBA to rescind the plan. Twelve Senate Democrats, including Edward Markey of Massachusetts, who serves as ranking member on the Senate Committee on Small Business and Entrepreneurship, wrote in a Sept. 21 letter to SBA Administrator Kelly Loeffler that the changes "redefine what it means to be a small business."
The plan would result in "large businesses — some with more than $1 billion in annual revenue — to compete for federal small business contracts," the senators added.
The SBA's new comment deadline is Nov. 20.
