Financing Small Business in America: Debt Capital in a Global Economy

By Roger E. Hamlin; Thomas S. Lyons | Go to book overview

Chapter 1
U.S. SMALL BUSINESSES AND
THE GLOBAL ECONOMY

THE IMPORTANCE OF SMALL BUSINESSES TO
THE U.S. ECONOMY

Defining [Small Business]
What constitutes a small business varies from place to place. In the United Kingdom, manufacturing firms with 200 or fewer employees are defined to be [small.] Japan and Korea consider firms with 300 or fewer employees to be small businesses. Five hundred employees is the upper limit for small businesses in France, Germany, Italy, and the United States (Odaka and Sawai 1999).The U.S. Small Business Administration (SBA) has further classified small businesses by developing firm size classifications by industry. These classifications are based on either number of employees or sales. Thus, the SBA defines small businesses as follows:
For most manufacturing and mining businesses—500 or fewer employees;
For all wholesale trade businesses—100 or fewer employees;
For most retail and service firms—$5 million in sales;
For most general and heavy construction firms—$27.5 million in contracts;
For all special trade contractors—$11.5 million in contracts; and
For most agricultural businesses—$750,000 in sales.

-1-

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