Classification as a small business matters, because the SBA size standard is used to determine whether a business, including any affiliates or subsidiaries, is eligible to participate in SBA and federal contracting programs. This eligibility can have significant financial implications, from obtaining access to small business financing, (including access to loans, investment capital, and grants) to getting preference in scoring when you compete for federal government contracts. In 2021, the federal government awarded 26% of all contracts to small businesses, totaling $147 billion.^[1]

In addition to meeting the relevant numerical size standard, a business must also meet the following criteria in order to be eligible for SBA and government contracting programs:

• For-profit enterprise
• Independently owned & operated
• Physically located & operating in the United States or its territories
  • If located outside the United States, it must maintain a U.S. operation and make a significant contribution to the U.S. economy through the payment of taxes or use of American labor, materials, or products.
• Not in a dominant market position nationally

SnackEver

Grecia Diaz and her family emigrated to Pittsburgh, PA from Venezuela. Because she was always looking for healthy snacks for her own family, she decided to start an e-commerce business from her home selling healthy snacks, like vegan pretzels and amaranth grain wafers.^[2] She got help from the University of Pittsburgh Small Business Development Center, which is funded by the SBA. Grecia took entrepreneurial classes that are offered in English and Spanish and got advice from a bilingual business consultant.^[3] She has been able to expand through the 2020 pandemic and the accompanying supply chain challenges, growing so much that her business more space than was available in her home and made a move off-site.^[4]