{"ok":true,"canonical_url":"https://dealroom.so/glossary/employee-based-size-standards","api_url":"https://dealroom.so/api/public/glossary/employee-based-size-standards","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"employee-based-size-standards","term":"Employee-Based Size Standards","group":"Reading the business","definition":"These are thresholds set by the SBA, defining a \"small business\" based on the average number of employees. Buyers must ensure the target business, including any affiliates, meets these standards to be eligible for an SBA 7(a) loan.","what_it_means":"The SBA uses NAICS codes to assign a size standard (either employee-based or revenue-based) to businesses. If the target business and its affiliates, as defined by SBA affiliation rules, exceed the employee-based limit for its primary NAICS code, it's ineligible for an SBA 7(a) loan. Verify this early in due diligence.","url":"https://dealroom.so/glossary/employee-based-size-standards","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"size-standard","term":"Size standard","url":"https://dealroom.so/glossary/size-standard"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"naics-code","term":"NAICS code","url":"https://dealroom.so/glossary/naics-code"},{"slug":"affiliation-issues","term":"Affiliation Issues","url":"https://dealroom.so/glossary/affiliation-issues"}],"related_questions":[{"question":"What specific factors trigger affiliation for size standards based on common management, officers, or directors?","url":"https://dealroom.so/for-lenders/questions/what-specific-factors-trigger-affiliation-for-size-standards-based-on-common-management-of"},{"question":"Beyond common officers/directors, how does a lender assess affiliation through \"shared key employee functions\" for SBA size standards?","url":"https://dealroom.so/for-lenders/questions/beyond-common-officers-directors-how-does-a-lender-assess-affiliation-through-shared-key-e"},{"question":"What if a business exceeds the SBA size standard based on revenue but not employees?","url":"https://dealroom.so/for-lenders/questions/what-if-a-business-exceeds-the-sba-size-standard-based-on-revenue-but-not-employees"},{"question":"How are SBA small business size standards determined for loan eligibility?","url":"https://dealroom.so/sba-loans/basics/how-are-sba-small-business-size-standards-determined-for-loan-eligibility"},{"question":"What are the current size standards for a manufacturing business eligibility?","url":"https://dealroom.so/for-lenders/questions/what-are-the-current-size-standards-for-a-manufacturing-business-eligibility"},{"question":"When does common ownership by an Employee Stock Ownership Plan (ESOP) trigger affiliation for size determination?","url":"https://dealroom.so/for-lenders/questions/when-does-common-ownership-by-an-employee-stock-ownership-plan-esop-trigger-affiliation-fo"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Employee-Based Size Standards","url":"https://dealroom.so/glossary/employee-based-size-standards","source_type":"DealRoom Data"}}