Are You Too Big for an SBA Loan? Not Likely.
Are You Too Big for an SBA Loan? Not Likely.
The SBA loan program is a popular option for small businesses seeking funding for growth and expansion. But there is a catch: your business must meet size requirements to qualify. We’ll explain the SBA's size standards and how they apply to you.
SBA Size Standards Explained
Unlike conventional lenders, SBA loans have specific size limitations based on your business, not the individual applicant or guarantor. The SBA defines a small business based on two main factors: industry size standards and the alternative size standard. A size standard is the largest that a concern can be and still qualify as a small business for Federal Government programs. For the most part, size standards are the average annual receipts or the average employment of a firm.
The SBA’s definition of a small business (under 500 employees) might overstate the "smallness" of some firms. A company with 499 employees and $40 million in revenue (the upper SBA threshold for some industries) is far from the typical small business, which often has fewer than 5 employees and less than $50,000 in revenue. This broad definition can skew perceptions and policy—support programs might benefit larger "small" businesses more than the micro-firms that dominate the landscape. Additionally, the focus on employer firms in some stats overlooks the 81.7% of small businesses that are non-employers.
Industry Size Standards
This is based on your business's primary industry and annual receipts. You can find a table of size standards by NAICS code on the SBA website (https://www.sba.gov/document/support-table-size-standards). In general, a small business must not exceed a certain annual revenue threshold set by the SBA for its specific industry.
Alternative Size Standard: If your business doesn't fit neatly into a single industry category, you can qualify under this standard. It has two parts:
Average Net Income: To qualify, your business's average net income after federal income taxes (excluding any carry-over losses) for the two full fiscal years prior to the loan application date cannot exceed $5 million. This is calculated based on the business's income, not the personal income of the guarantor. To be considered "too big" under this standard, the business itself would need to generate more than $5 million annually in net income, excluding the owner's salary.
Tangible Net Worth: The tangible net worth of your business, excluding goodwill, practice value, and intangible assets, cannot exceed $15 million. This is based solely on what the business owns minus any debts. This limits how large your business and affiliated entities can be while still qualifying for an SBA loan.
Affiliation
The SBA also considers affiliation with other businesses when determining size. In general, businesses you control or that control you will be counted towards your size, even if they operate under a different name. The text you provided mentions a higher threshold for affiliation ($20 million tangible net worth and $6.5 million average net income), but this information seems to be outdated. It's always best to refer to the official SBA website for the latest regulations (https://www.sba.gov/size-standards)).
The Vast Majority of Businesses Qualify for SBA lending
The average small business in the U.S. in 2025 is very small: most have no employees, and those that do average 12 employees, with 89% employing fewer than 20. Revenue-wise, 34% of small businesses generate less than $50,000 annually, 27% exceed $200,000, and only 9% surpass $1 million. Non-employer firms average $47,794, while employer firms with 5 to 9 employees hit $1 million, and those with 10 to 19 employees average $2,164,000. These stats highlight the diversity of the small business landscape—most are micro-operations struggling to scale, while a small fraction achieve significant revenue. In either case, an SBA loan can be ideal.
The revenue data paints a picture of significant inequality among small businesses. Non-employer firms, which dominate the landscape, are largely low-revenue operations, with 78% earning less than $50,000 annually. This aligns with the fact that many are sole proprietors or freelancers who may not aim to scale. In contrast, employer firms see a dramatic jump in revenue as they grow in size—businesses with just 5 to 9 employees average $1 million, and those with 10 to 19 employees average over $2 million. However, only 9% of all small businesses exceed $1 million in revenue, showing that high earners are a small minority.
The profitability stats are telling: while 65% of small businesses are profitable, 30% are still losing money, and it takes 2 to 3 years to break even. This underscores the financial fragility of many small businesses, especially those in the sub-$50,000 revenue tier, which make up at least 34% of the total.
A Few Small Business Size, Revenue and Profit Statistics
86.3% of small business owners earn less than $100,000 per year.
14% earn more than $100,000 annually.
The median small business owner salary in 2025 is $67,000, though this varies by state (e.g., $120,339 in Washington vs. $40,281 in Mississippi).
Average annual revenue in 2024 was $519,886, up 13.1% from $451,443 in 2023.
65.3% of small businesses were profitable in 2022, a trend likely continuing into 2025.
40% of small businesses become profitable at some point, but 30% break even, and 30% operate at a loss.
34% have annual revenue of less than $50,000.
27% estimated their 2020 sales would exceed $200,000 (likely higher by 2025 due to inflation and growth).
9% have revenue over $1 million.
How to Determine Your Business Size
For those of you who think you might be too big for an SBA loan, the SBA has detailed regulations on how to calculate your business size, including how many employees you have and your average annual receipts. This can get complex, so it's recommended to consult with a business advisor or refer to the SBA's guides for calculating size standards (https://www.sba.gov/document/support-table-size-standards). Alternatively, just call a LoanBox advisor and they can help with the determination. If you’re too big for an SBA loan you may be just right for a conventional LoanBox lender.
Important Considerations
Labor Surplus Areas: If your business is located in a labor surplus area designated by the Department of Labor, the size standards are increased by 25%.
When Size is Determined: The SBA determines your business size based on the date your application is accepted for processing. Subsequent changes in size won't disqualify you.
Acquisitions: If you're using the loan proceeds to acquire another business, the SBA will combine the size of both businesses to determine eligibility.
Think Inside the LoanBox
For smart business lending think inside the LoanBox. Just log in, answer questionnaires, complete your loan package, and the platform will match you to the exact right lenders you match 100% of dozens of criteria points. Select which lenders you want to access your loan package and offer a loan proposal. Receive loan proposals from interested lenders, select the winning lender, and always know what’s going on from application to funding and what’s needed next in the loan process. Or have a friendly LoanBox Advisor just handle everything for you.