How to Complete SBA Form 355
Still, every one of the entrepreneurs who received these business loans had to properly fill out their paperwork. One critical piece of that paperwork is the SBA Form 355, or the Application for Small Business Size Determination.
If you plan to apply for any SBA program other than the Small Business Investment Companies (SBIC) program, you’ll have to fill out this form. To help you do so, this post will review what SBA Form 355 is and how to complete it.
What is SBA Form 355?
SBA Form 355 provides information to the SBA that it needs to determine whether your company fits their definition of a small business. For reference, according to the SBA, “A small business is a concern which is independently owned and operated, not dominant in its field of operation, and does not exceed the size standard applicable to the procurement or program for which the business is applying.”
Based on the information you provide on this form, the SBA will either approve or deny your eligibility for their loan programs.
What Information is Required for the SBA Form 355?
When you fill out this form, you’ll be asked for basic identifying information about your business. You’ll also need to determine the purpose for which you’re requesting a size determination and answer a few questions about the nature of your business.
From there, the primary focus of the form is to ensure that your business is independently owned, not an industry leader, and within the size standards for your industry.
1. Size Standards
The size standards are based on either the number of employees in your company or the annual receipts that your company has generated. These standards are shown in the Table of Small Business Size Standards.
Keep in mind that the SBA bases size standards on your industry as described by the North American Industry Classification System (NAICS). To find the size standards applicable to your business, use the NAICS identification tool to find your NAICS code, then look up that code in the Table of Small Business Size Standards. There, you’ll find the size standard for your industry.
2. Ownership Independence
To determine your company’s affiliations, SBA Form 355 asks for information about any officers, directors, owners, partners, and principal stockholders that you may have. If you do have affiliates — whether they’re for-profit or not — their total receipts or number of employees will count towards your total.
Keep in mind that the SBA has specific rules that dictate whether an entity, business, or person is considered an affiliate for the purposes of determining business size.
You’ll need to provide contact information for your affiliates, the position they hold, as well as those affiliates’ ownership interest in your company. Finally, if your affiliates own another company, you’ll also need to provide information about their ownership percentages and the size of those companies.
Conclusion: Make Sure You Understand the SBA Form 355
The final part of SBA Form 355 only needs to be filled in under certain circumstances, which are detailed on the form itself at Part V. In some cases, the SBA will ask for additional information, but what we’ve reviewed in this post covers what most business owners should expect on Form 355.
After finishing this form, you should have your lawyer, a trusted colleague, or your lender review it. At best, mistakes on Form 355 will slow down your loan application process. At worst, a single mistake could cost you thousands of dollars.
Have you completed this form to apply for SBA financing? Tell us about your experience in the comment section below!
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