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Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Proposed Rules
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TABLE 14EXPANSIVE IMPACTS OF CHANGING THE AVERAGING PERIOD FOR RECEIPTS FROM 3 YEARS TO 5 YEARS
Continued Firms gaining small business status
Impact of proposed change Number of additional 7a and 504 loans to newly qualified firms or/and current small firms extending small status
Additional 7a and 504 loan amount to newly qualified firms or/and current small firms extending small status $ million
Additional 7a and 504 loan amount as % of total disaster loan amount in the baseline
Number of additional disaster loans to newly qualified firms or/and small firms extending small status
Additional disaster loan amount to newly qualified firms or/and small firms with extended small status $ million
Additional disaster loan amount as % of total loan amount in the baseline

Firms extending small business status
Total expansive impact
1

4

5

$0.2

$1.9

$2.1

0.0

0.0

0.01

1

1

2

$0.00
0.0

$0.01
0.0

$0.01
0.002

1 Total impact represents total unique industries impacted to avoid double counting as some industries have large firms gaining small business status and small firms extending small business status.
2 Total impact represents total unique firms impacted to avoid double counting as some firms may gain small business status in at least one NAICS code, while extending small business status in at least one other NAICS code.

Growing small businesses that are close to exceeding the current size standards will be able to retain their small business status for a longer period under the 5-year receipts average, thereby enabling them to continue to benefit from the small business programs.
Under SBAs 7a and 504 loan programs, based on the data for fiscal years 20182020, SBA estimates that about 1 SBA 7a and 504 loans totaling $0.2 million could be made to these newly qualified small businesses under the proposed change. Additionally, small businesses could receive up to 4
SBA 7a and 504 loans totaling $1.9
million due to the expansion of their size status. Together, these amounts represent a 0.01 percent increase to the loan amount in the baseline.
Newly qualified small businesses and those with extended small business status will also benefit from the SBAs disaster loan program. Since the benefit provided through this program is contingent on the occurrence and severity of a disaster in the future, SBA
cannot make a meaningful estimate of this impact. However, based on the historical trends of the SBA disaster loan data, SBA estimates that, on an
annual basis, the newly defined small businesses under the proposed change could receive about 1 disaster loan, totaling about $0.003 million. Similarly, extending small business status for a longer period could result in small businesses receiving 1 disaster loans, totaling about $0.01 million. These results are presented in Table 14, above.
Additionally, the newly defined small businesses, as well as those with a longer small business status, would also benefit from reduced fees, less paperwork, and fewer compliance requirements but SBA has no data to quantify this impact.
E. Contractions in Eligibility for Small Business Status 1. Contractive Effects of Changing the Averaging Period for Employees From 12 Months to 24 Months As stated previously, the change enacted under Public Law 116283 may not always and necessarily benefit every small business concern. When businesses monthly employees are declining or when the number of employees for the latest 12 months are lower than those for the earliest 12
months of the 24-month averaging period, the 24-month employee average
would be higher than the 12-month average, thereby ejecting small businesses out of their small status sooner or rendering some small businesses other than small immediately. Such small businesses would no longer be eligible for Federal small business opportunities, such as SBAs loans, Federal small business contracts, and other Federal assistance available to small businesses. These impacts are provided in Table 15, Contractive Impacts from Changing the Averaging Period for Employees from 12
Months to 24 Months, below.
SBA estimates that, of 133,958 firms in 2019 SAM that were small under at least one employee-based size standard based on the 12-month employee average, 260 firms or 0.2 percent would lose their small status and another 100 firms or 0.08 percent would see their size status shortened as a result of the proposed change.
Similarly, based on the 2012 Economic Census data, 763 firms would lose their small business status and 287 firms would see their size status shortened, which represent, respectively, 0.1
percent and 0.04 percent of total small firms subject to an employee-based size standard.

TABLE 15CONTRACTIVE IMPACTS FROM CHANGING THE AVERAGING PERIOD FOR EMPLOYEES FROM 12 MONTHS TO 24
MONTHS
Small firms losing small status
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Impact of proposed change Number of industries impacted
Number of small firms losing or/and shortening small statusSAM as of Sept 1, 2019
Small firms losing or shortening small status as % of total small firmsSAM as of Sept 1, 2019
Number of small firms losing or extending small status2012 Economic Census

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Small firms shortening small status
Total contractive impact
190

64

1 211

260

101

2 361

0.2
763

0.08
287

0.3
1,050

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