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Jun 26, 2008 10:18 AM

The Small Business Administration (SBA) is reviewing the way it determines the definition of a small business and a decision is expected by the end of the year.

The New England Fuel Institute (NEFI) reported in its newsletter, NEON that the SBA indicated the review is necessary because many small business size standards are currently based on annual gross receipts that are often skewed by fluctuating market forces and inflation that have no bearing on actual company size.

NEFI said that as a result of those consideration, many business owners could lose their small business status. That would mean losing benefits that come with that status, such as qualification for low interest loans, federal grants, and exemption from or reduced compliance with many state and federal regulatory programs.

The SBA wants to eliminate the gross receipts threshold and replace it with a size determination threshold based on the number of employees in a business. NEFI said that about half of all small business size standards already use an employee-based threshold.