Rural small businesses in 18 states have a new route into the HUBZone Program, after the Small Business Administration said governors' petitions have added 252 Governor-Designated Covered Areas to the map. SBA announced the approvals on October 22 in a press release counting every governor petition approved since January 2025, and on November 5 the government contracts law firm Koprince McCall Pottroff examined how new the push really is. Its answer: the designations widen eligibility, but the pace of approvals looks much like what SBA was doing before the change in administrations.
For contractors, the practical question is narrower than the political framing. A rural firm that sat just outside the existing HUBZone map may now sit inside a covered area, and that can change whether it can compete for HUBZone opportunities on federal work.
Which 18 States Gained Governor-Designated HUBZone Areas?
SBA listed the 18 states whose petitions it has approved under Administrator Kelly Loeffler. Three are marked new in the release: Indiana, Nevada and Hawaii. The other 15 are Connecticut, Illinois, Kansas, Louisiana, Maine, Michigan, Mississippi, New Mexico, New York, Tennessee, Texas, Utah, Virginia, Wisconsin and Wyoming. Taken together, those approvals establish 252 Governor-Designated Covered Areas.
The release says thirty states now participate in what SBA calls the Governor-Designated HUBZone Initiative, under which the agency works with governors to designate qualifying rural areas where small businesses may seek certification. "Working with state governors, the Trump SBA is expanding access to the HUBZone Program and opening new pathways for rural small businesses to compete for federal contracts," Loeffler said in the release.
SBA also said that in reviewing petitions it worked with governors to align the new covered areas with Opportunity Zones where appropriate. The agency pitched the pairing as a way to combine Opportunity Zone investment incentives with HUBZone contracting access, and it tied the effort to onshoring, domestic manufacturing and its partnership with the Department of War through the Smaller War Plants Commission, which the release describes as focused on strengthening domestic supply chains and supporting small manufacturers in the defense industrial base.
Why the 50,000-Population Cap Keeps These Areas Rural
The new areas are not scattered across cities and suburbs, and the regulation explains why. Writing for SmallGovCon, Koprince McCall Pottroff partner John Holtz points to 13 C.F.R. 126.104, which states that a governor-designated area can only be "located outside of an urban area, as determined by the Bureau of the Census, with a population of not more than 50,000."
That limit shapes who benefits. Firms headquartered in metro areas will not find new eligibility through this channel, however distressed their neighborhoods. The beneficiaries are small manufacturers, suppliers and service providers in small towns and open country, the same audience SBA's release names when it describes "small manufacturers, suppliers, and service providers" growing, hiring and investing in their communities.
Is the 252-Area Expansion a Break From Past SBA Practice?
The release frames the approvals as an achievement of the current administration, but the mechanism predates it. Holtz notes that the Governor-Designated Covered Area "is not a brand-new creation" and that Congress implemented it through the FY 2018 National Defense Authorization Act.
SBA also started using it well before January 2025. According to the SmallGovCon post, SBA approved its first governor's petition in May 2021, adding 35 Governor-Designated Covered Areas in Illinois. A December 2022 expansion added 25 areas in Louisiana. By March 2023, per SBA figures Holtz cites, 13 governors had requested additional HUBZone areas, adding 231 rural areas to the map.
Set against that record, 252 areas from 18 governors since January 2025 reads as a continuation rather than a reset. "Thus, it doesn’t appear that there has been any serious change in how SBA or state governors have been approaching the matter since SBA first approved a governor’s petition in 2021," Holtz wrote. He adds that there seems to have been a slight uptick in the rate of approval, but that it "appears to be in accord with the practice of SBA prior to the change in administrations."
Holtz does see evidence that SBA wants the tool used more. He cites an SBA brochure from April 2026 that describes a "HUBZone Program’s Governor-Designated Areas Initiative," which he reads as a sign the agency is actively pressing states to make designations.
How the HUBZone Push Contrasts With SBA's Other Programs
The HUBZone Program has generally drawn less agency attention than the 8(a) Business Development, women-owned and service-disabled veteran-owned programs, Holtz observes, though SBA has recently moved to make some aspects of the program a little stricter. What makes the October announcement stand out, in his view, is the contrast with how SBA has approached other programs, especially 8(a).
He writes that SBA "appears to look upon the HUBZone Program with approval, at least with regards to rural areas," and says the program "could see a sort of revitalization." He urges companies affected by recent shifts in SBA policy to consider whether the HUBZone Program presents an opportunity.
What It Means for Contractors
The expansion does not appear to change HUBZone's core eligibility tests, which turn on where a firm is located and where its employees live; what has changed is the map those factors are measured against. Practical steps:
- Recheck your location. Rural firms in any of the 18 approved states, and especially in Indiana, Nevada and Hawaii, should compare their principal office address against the current HUBZone map rather than relying on an eligibility check from a year or two ago.
- Recheck where employees live. Employee makeup is part of the test. A newly designated area near your workforce could shift your numbers even if your office address does not move.
- Look at Opportunity Zone overlap. Because SBA aligned new designations with Opportunity Zones where appropriate, rural firms in those zones may be able to pair investment incentives with HUBZone contracting access.
- Get counsel before you certify. Holtz recommends that companies review their "location and employee makeup" and check with a federal contracting attorney on how the rules apply before pursuing certification.
For firms outside the 50,000-population threshold, nothing here changes. For rural firms in the 18 states, the map has moved, and eligibility worth checking may now exist where it did not before.
