WASHINGTON, DC-The US Small Business Administration is expanding the definition of "small business". That is, it is increasing the size standards for companies in a number of categories, including real estate. All told, some 7,400 additional businesses will quality as small under the new standards.
Size standards define the maximum size a firm can be and still be considered a small business. The SBA published the change in the Federal Register on Friday.
The SBA also deleted REITs from its table of size standards.
The expansion should, at least at the margins, give a boost to small-sized borrowers that want to purchase their own office or industrial space. Especially during the recession, SBA lending salvaged a number of deals that met its criteria.
For example, earlier this year Dick Bryant, principal in Lee & Associates' Atlanta office, told GlobeSt.com that borrowers in Atlanta were tapping the SBA to get deals done they might not have otherwise. Stabilized assets have enough lenders interested, but not so much for the industrial and office buildings that are vacant or under utilized in the area.
It is with these properties that Bryant has seen an uptick in SBA financing. "We have done five or six of those this year alone."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
