What Is Considered a Medium-Sized Business Under SBA Rules?

There is no official federal definition of what is considered a medium-sized business in the United States. The Small Business Administration decides only whether a company is small enough to qualify for small business programs; anything above that line is grouped as “other than small,” with no separate “medium” tier. In private-sector practice, the mid-market label generally covers companies with roughly $10 million to $1 billion in annual revenue, or those employing somewhere between a few hundred and a few thousand workers, and the exact placement depends on the industry and which framework you’re using.

Why the U.S. Has No Official Medium Category

The SBA’s regulatory system is built around one question: is your company small enough to qualify for small business programs? If it exceeds the size standard for its industry, the SBA classifies it as “other than small” and moves on. There is no second tier and no federal program specifically reserved for mid-market firms. The size standards themselves live in 13 CFR Part 121 and vary dramatically by industry, so the line between “small” and “everything else” shifts based on what a company does.¹

The U.S. Census Bureau doesn’t use a “medium” label either. Its Statistics of U.S. Businesses program groups companies into employee-count brackets without attaching size labels like small, medium, or large.² The honest answer to what qualifies as medium-sized is that it depends on who’s asking and why.

The Mid-Market Ranges Used in Practice

The term “mid-market” comes mainly from private-sector financial practice. Investment banks, lenders, and research organizations commonly define the middle market as companies generating between $10 million and $1 billion in annual revenue, with further subdivisions:

Lower middle market: roughly $10 million to $50 million
Core middle market: roughly $50 million to $500 million
Upper middle market: roughly $500 million to $1 billion

These ranges have no regulatory force. They drive how businesses access capital markets, private equity, and commercial lending products, and they’re the numbers most bankers and advisors have in mind when they call a company “mid-sized.”

How SBA Size Standards Draw the Line

Since the only federal cutoff that matters is the one between “small” and everything above it, understanding where your company sits often means starting with the SBA’s small business threshold for your industry. Cross that line, and by federal terminology you’re mid-sized or larger.

Employee-Based Standards

When the SBA uses headcount, the threshold is not a flat 500 across the board. Employee-based standards range from as low as 100 workers in some service industries to 1,500 in certain manufacturing and mining sectors. The 500-employee figure gets repeated often because it historically served as a common default, but a company with 400 employees could be “other than small” in one industry while a company with 1,200 employees still qualifies as small in another.³

Employee count is calculated by averaging across all pay periods for the preceding 24 calendar months. Part-time and temporary workers count the same as full-time employees.⁴ A seasonal hiring surge in December counts just as much as your baseline January staff.

Revenue-Based Standards

For industries where headcount is a poor proxy for scale, like professional services, retail, and construction, the SBA uses annual receipts instead. Revenue-based thresholds range from $8 million in some service sectors to $47 million in industries like hospitals and food-service contracting.³ A company earning $30 million might be small in one industry and well past the threshold in another.

The SBA generally averages total receipts over the most recently completed five fiscal years. For the 7(a) Loan Program, Disaster Loans, and the 504 Loan Program, a business that has operated for at least three years can choose to average over either three or five fiscal years, whichever produces a more favorable result.⁵ Receipts include all revenue received or accrued, reduced by returns and allowances. The SBA excludes net capital gains or losses, taxes collected from customers and remitted to a taxing authority, transactions between a business and its affiliates, and amounts collected on behalf of others by agents such as travel agents, real estate brokers, and freight forwarders. Subcontractor costs, reimbursements, investment income, and payroll taxes stay in the calculation.

Manufacturing Is Measured by Employees Only

Manufacturing firms (NAICS Sectors 31–33) are measured exclusively by employee count. The revenue column in the size standards table is blank for every manufacturing NAICS code, and thresholds typically range from 500 to 1,500 employees depending on the subsector.¹

NAICS Codes Change the Answer

The North American Industry Classification System assigns every business a six-digit code based on its primary economic activity, and the SBA ties each code to a specific size standard. Two companies with identical revenue can have completely different size classifications. The SBA reviews and adjusts standards periodically; the most recent inflation adjustment to revenue-based standards was finalized in July 2023, and a proposed rule for the next round was published in August 2025.⁶ Check the current table before assuming your status hasn’t changed.

Affiliation Can Push You Over

The SBA doesn’t just count the employees on your payroll or the revenue on your books. If your company has affiliates, meaning parent companies, subsidiaries, or entities you share control with, their numbers get added to yours. The agency looks at ownership stakes, management overlap, contractual relationships, and any arrangement where one entity has the power to control another. A 300-person company that’s 51% owned by a 2,000-person parent will be measured at 2,300 employees for size purposes.⁷

This catches private-equity-backed companies more than anyone. A firm that looks mid-sized on its own may be classified as “other than small” once its investor’s portfolio companies are factored in.

Regulatory Thresholds That Make a Company Feel Mid-Sized

Even without an official “medium” label, a cluster of federal regulations kicks in as companies grow past certain employee counts. These are where mid-sized firms feel the sharpest jump in compliance obligations compared to small businesses.

At 50 employees, an employer with at least 50 full-time employees (including full-time equivalents), averaged over the prior calendar year, is an Applicable Large Employer under the Affordable Care Act and must offer affordable health coverage to full-time workers or face shared responsibility payments. A seasonal-worker exception applies if the workforce only exceeds 50 for 120 days or fewer during the year.⁸
At 50 employees, a private-sector employer with 50 or more employees in 20 or more workweeks during the current or preceding calendar year must provide eligible workers with up to 12 weeks of unpaid, job-protected leave per year under the Family and Medical Leave Act.⁹
At 50 employees, federal contractors with a contract worth $50,000 or more must develop and maintain written affirmative action programs at each establishment.¹⁰
At 100 employees, all private-sector employers must file annual EEO-1 workforce demographic reports with the Equal Employment Opportunity Commission. Federal contractors hit this requirement at 50 employees.¹¹
At 100 employees, the WARN Act requires 60 calendar days’ advance written notice before plant closings or mass layoffs affecting 50 or more workers at a single site.¹²

The cumulative weight of these obligations is often what companies mean when they say they “feel” mid-sized. No one labeled them that way; compliance costs simply jumped noticeably once they crossed these lines.

How Other Countries Define Medium

If you’re looking at a foreign framework, the numbers are different and usually stricter. The European Union applies a single uniform framework across all member nations and all sectors. Under EU Recommendation 2003/361, a medium-sized enterprise employs fewer than 250 people and has either annual turnover of no more than €50 million or a balance sheet total of no more than €43 million. A company must stay below the employee cap and at least one of the two financial limits to qualify.¹³

The 250-employee ceiling is dramatically lower than many American industry thresholds, where a manufacturer with 1,000 workers can still be small. The fixed EU numbers also make compliance straightforward, with no need to look up an industry code or calculate a multi-year average.

The United Kingdom maintains its own thresholds under the Companies Act 2006, updated for accounting periods beginning on or after April 6, 2025. A company qualifies as medium-sized if it meets at least two of three conditions: annual turnover of no more than £54 million, a balance sheet total of no more than £27 million, and no more than 250 employees on average.¹⁴ The employee cap matches the EU’s, but the financial thresholds are set independently and were raised significantly from the prior limits of £36 million turnover and £18 million balance sheet.

A firm that qualifies as medium in the UK might exceed the EU’s turnover limit, or fall well within the SBA’s small business threshold for its industry in the United States. There is no international harmonization of these standards, so applying the wrong country’s framework to a compliance question produces the wrong answer.

1
eCFR. 13 CFR Part 121 – Small Business Size Regulations
2
U.S. Census Bureau. Glossary – Statistics of U.S. Businesses Definitions
3
eCFR. 13 CFR 121.201 – What Size Standards Has SBA Identified by North American Industry Classification System Codes
4
eCFR. 13 CFR 121.106 – How Does SBA Calculate Number of Employees
5
eCFR. 13 CFR 121.104 – How Does SBA Calculate Annual Receipts
6
Federal Register. Small Business Size Standards: Monetary-Based Industry Size Standards
7
eCFR. 13 CFR 121.103 – How Does SBA Determine Affiliation
8
Internal Revenue Service. Determining if an Employer Is an Applicable Large Employer
9
U.S. Department of Labor. Employer’s Guide to the Family and Medical Leave Act
10
eCFR. 41 CFR Part 60-741 Subpart C – Affirmative Action Program
11
U.S. Equal Employment Opportunity Commission. EEO Data Collections
12
U.S. Department of Labor. Plant Closings and Layoffs
13
Internal Market, Industry, Entrepreneurship and SMEs. SME Definition
14
GOV.UK. Preparing and Filing Companies House Accounts