SBA Size affiliation ruling – much to consider
A recent ruling by the SBA Office of Hearings and Appeals denied small business designation to a company because more than 70% of its current revenues were from one customer. Ruling that the company was not economically independent from this customer. So when determining if the company was a small business based on its industry standards, the SBA ruled that since it was not economically independent, therefore its customer must also be included in the size determination process.
The bottom line is that legal affiliates are not the only consideration when determining whether or not your company meets the size standards to be considered a small business. If your company is economically dependent one primary customer, that customer will be considered by the SBA in its evaluating process.
If you have any question feel free to contact us and one of our experts will be glad to assist you in your evaluation.