SBA Rundown: What Small Business Owners Need to Know about Recent Updates
Staying up to date with the latest developments from the Small Business Administration (SBA) is important for small business owners and aspiring entrepreneurs. Recent updates from the SBA present both opportunities and potential challenges for those looking to value, buy, or sell a business. Here are some of the most recent changes and updates that may have an impact on your business decisions.
New Rules for Federal Contracts
The SBA has proposed changes to help small businesses get more federal contracts:
- More Opportunities: Some contracts will now be exclusive to small businesses, giving Main Street businesses a better chance to win.
- Less Paperwork: They're cutting down on some of the requirements, making it easier for small businesses to bid on contracts.
- Longer Certification: A new five-year period before recertification is needed for set-aside contracts, offering more stability and predictability.
What this means for you:
- If you're selling a business: Your business might be more valuable if it has access to these contracts.
- If you're buying a business: A business with these contracts might be a good investment, but make sure you'll still qualify as a small business after purchase.
Selling a Business with Set-Aside Contracts
When it comes to selling a business that has set-aside contracts (like those for veteran-owned or women-owned businesses), keep in mind:
- Contracts Don't Automatically Transfer: If the buyer doesn't meet the original set-aside criteria, the special status doesn't automatically transfer.
- Recertification Required: The new owner must recertify the business's size and status after purchase.
- Existing Contracts: Generally, existing contracts can continue, but they might be less valuable to the government agency for meeting their goals.
- Future Opportunities: If the new owner doesn't meet the set-aside criteria, the business won't be eligible for new contracts in that category.
Changes to SBA Loan Programs
Good news for business owners looking for financing options:
- Debt Refinancing: The SBA 504 Loan Program now allows for the refinancing of business debt.
- Better Rates: Recent rate cuts from the Federal Reserve could lower borrowing costs.
This could help if you're looking to:
- Buy a business
- Expand your current business
- Restructure your business debt
Export Assistance Available
The SBA is providing $20 million in grants to help small businesses start or increase exporting:
- Purpose: To help more small businesses export and increase the value of their exports.
- Benefits: Resources to explore new markets, meet international standards, and grow through exports.
- COVID-19 Recovery: Aimed at helping businesses bounce back from the pandemic's impact.
For businesses that are looking to expand internationally or for entrepreneurs looking to buy a business with export potential, these grants could be a valuable resource.
National Small Business Week Awards 2025
The SBA is now accepting nominations for its annual awards:
- Categories: Include Small Business Person of the Year, Exporting, and Young Entrepreneur, among many others.
- Deadline: Nominations due by November 10, 2024.
- Benefits: Winners often see increased visibility and business growth.
Winning or even being nominated has the potential to boost a business's profile, potentially making it more valuable if you're looking to sell.
Impact of SBA Developments on Buying or Selling a Business
1. For Sellers:
- New contracting rules and export assistance could increase the value of a business.
- Changes to set-aside contract rules might affect your business's appeal to certain buyers.
2. For Buyers:
- Businesses with federal contracts or export potential could be wise investments.
- If buying a business with set-aside contracts, be aware of how size recertification may impact those contracts after the transfer.
3. For Both:
- New SBA loan options could make financing for expansion or buying an existing business easier.
- Always do thorough research and consider talking to a professional or business broker with experience in selling businesses with government contracting to ensure a smooth transaction.
Staying informed about SBA updates and changes, equips business owners to make informed decisions regarding the valuation, buying, or selling of small businesses. Visit the BizBuySell Business Broker Directory to find a broker to help you with your business transactions.