12 C.F.R. § 1002.106
§ 1002.106 Business and small business. (12 CFR Part 1002)
Operative Text
(a) Business has the same meaning as the term “business concern or concern” in 13 CFR 121.105. (b)(1) Small business has the same meaning as the term “small business concern” in 15 U.S.C. 632(a), as implemented in 13 CFR 121.101 through 121.107. Notwithstanding the size standards set forth in 13 CFR 121.201, for purposes of this subpart, a business is a small business if its gross annual revenue, as defined in § 1002.107(a)(14), for its preceding fiscal year is $1 million or less. (2) Every 5 years after January 1, 2030, the gross annual revenue threshold set forth in paragraph (b)(1) of this section shall adjust based on changes to the Consumer Price Index for All Urban Consumers (U.S. city average series for all items, not seasonally adjusted), as published by the United States Bureau of Labor Statistics. Any adjustment that takes effect under this paragraph (b)(2) shall be rounded to the nearest multiple of $100,000. If an adjustment is to take effect, it will do so on January 1 of the following calendar year.
Section 1002.106 of 12 CFR Part 1002 establishes how the terms 'business' and 'small business' are defined for purposes of this subpart. A 'business' takes its meaning from a separate federal regulatory definition used in Small Business Administration rules. A 'small business' is generally defined by reference to federal statute, but this subpart applies its own revenue-based threshold — gross annual revenue of $1 million or less in the preceding fiscal year — which overrides the size standards otherwise used by the SBA. Every five years starting after January 1, 2030, that $1 million threshold is subject to automatic adjustment tied to the Consumer Price Index for All Urban Consumers, rounded to the nearest $100,000, and any such change takes effect on January 1 of the following year.
Plain English — not legal advice.
Property owners and managers who extend credit to business applicants should be aware that § 1002.106 sets the definitional boundaries for what counts as a 'business' and a 'small business' under this subpart. Compliant operators generally track whether a business applicant's gross annual revenue for its preceding fiscal year falls at or below the applicable threshold — currently $1 million — to determine whether small-business-specific obligations apply. Because that threshold adjusts every five years after January 1, 2030, based on CPI changes, operators typically monitor official regulatory updates to ensure their intake and classification processes reflect the current figure.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While § 1002.106 is primarily a definitional provision, it directly affects the protections that may apply when a small business seeks credit, including in contexts involving commercial rental financing. If you are a small business owner or operator and believe a creditor has misclassified your business in a way that affected your rights under this subpart, you may have grounds to raise that classification as an issue in a complaint or regulatory proceeding. Tenant-rights and small-business advocacy organizations can help you understand how the definitions in § 1002.106 interact with any protections that may apply to your situation.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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