Legal Blog

Small Business Size Standards: Calculation of Annual Average Receipts

Recently, the Small Business Administration issued a proposed rule to change the manner in which it determines the size for those companies whose size is measured by revenues.  The proposed rule, if implemented, will change the measurement from a company’s average annual receipts over three years to its average annual receipts over five years.  The public has been waiting to see what the SBA would do for quite some time.  On December 17, 2018, Congress passed the Small Business Runway Extension Act, where this concept was introduced.  Shortly after passing the law, however, the SBA made it clear that the law, as changed, did not impact the SBA.  Despite this, the SBA has now agreed to implement the change.  This is a big deal to small businesses who perform work for the federal government.





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