The U.S. Small Business Administration plans to widen its definitions of “small business” to add another estimated 110,000 companies to the ranks of the 36.2 million small businesses in the country, an increase of 0.3%. The move would make these firms newly eligible for SBA loans and allow them to bid on government contracts that are reserved for the smallest businesses—though the proposed policy change likely faces months of federal review before it’s fully adopted.

According to a notice published Thursday morning in the Federal Register, the agency aims to update its “size standards” across industries to help more small firms compete with bigger businesses such as Boeing and Raytheon that tend to dominate the government contract arena.

Semiconductor manufacturers, for instance, would now be classified as “small businesses” as long as they have fewer than 2,800 employees, up from the prior threshold of 1,250 workers; shipbuilders could go from 1,300 employees to 2,300 and retain their small business status; and oil exploration firms with up to 2,650 workers would qualify, an increase from 1,000.

In addition, ranchers and other businesses in the........

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