The Bush Administration took steps to change its process for classifying companies as "Small Businesses." The Small Business Administration (SBA) has proposed a rule that would allow 1,100 more businesses to be classified as small. If the rule is adopted, the SBA estimates that 34,100 companies would lose their small-business status while 35,200 new firms would fall under the category. The rule would move SBA's definition of small businesses away from average annual receipts. Instead, the SBA, with a few exceptions, would define a small business based on the number of workers the business employs. If a company has receipts below $6 million, it must have 50 or fewer employees to be classified as small under the SBA proposal. If a small business uses a subcontractor, the subcontractor's employees would not be applied to the employee count.
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