For SBA lenders
Short answer
To qualify under the alternative size standard, a business must submit a certification that its tangible net worth is less than $15 million and its average net income for the preceding two years is $5 million or less.
The SBA provides an alternative size standard for businesses that may exceed the revenue-based or employee-based size standards for their industry but are still considered small. This alternative test requires the business's tangible net worth to be less than $15 million and its average net income for the two fiscal years preceding the application to be $5 million or less. A formal certification or attestation from the business is required.
A construction company, with annual revenues exceeding its industry's size standard, applies for a 7(a) loan. To qualify, the lender obtains a certification from the company's CPA confirming its tangible net worth is $12 million and its average net income for the last two years was $4 million, thus meeting the alternative size standard.
Insider move
Lenders must obtain accurate, verifiable documentation for both tangible net worth and average net income from an independent source (e.g., CPA-prepared statements) when using the alternative size standard. Miscalculation or insufficient proof could render the borrower ineligible and negate the SBA guaranty.
13 CFR Part 121 - Small Business Size Regulations
SBA Table of Size Standards
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on affiliation & size
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day