SBA Revises Auto Dealer Size Standard

SBA Revises Auto Dealer Size Standard

In a major victory for dealers, the Small Business Administration (SBA) has revised the size standard for NAICS 441110: New Car Dealers. Responding to a multi-year effort by NADA, the new 200-employee standard replaces one based on annual gross receipts of $29 million. Dealerships that fall below the size standard are eligible to apply for SBA loan guarantee programs, including 7(a) working capital loans, 504 real estate loans, or the new floor plan pilot program SBA intends to issue before year end.

Note that the recently enacted Small Business Jobs Act set a new maximum alternative size standard of $15 million net worth and $5 million in net income (as measured over two years). A new-car dealer may qualify as a small business under either the 200 employee standard or this net worth/net income alternative.