SBA Proposes Sweeping Changes to Small Business Size Standards

Source: Pillsbury Law

On August 20, 2026, the Small Business Administration (SBA) published a proposed rule that would fundamentally restructure the way the agency establishes small business size standards for federal contracting and lending programs. As described in the accompanying revised methodology white paper, the proposed rule revises the size-standard methodology for many industries across the economy, consolidates 995 size standards into 338, and shifts many industries into employee-based size standards. Comments on both the proposed rule and the revised methodology are due by September 21, 2026.

Revised Size Standards Methodology
The current SBA methodology, last updated in 2024, uses seven analytical factors to calculate size standards based on six-digit North American Industry Classification System (NAICS) codes, producing 995 individual size standards. The revised methodology, which SBA presents as a significant simplification, makes five changes.

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