My experience has been that government organizations vastly prefer large (although not necessarily huge) organizations as they have the staff and experience and most importantly, money, to properly comply with government regulation. Smaller business are constantly trying to cut corners instead hiring the lawyers and other staff to properly handle paperwork.
Regulation to a large degree is a fixed cost, or at least its subject to large economies of scale. To properly comply with all regulations from all departments at all levels of government is going to require a significant amount of labor from experienced (read expensive) staff who are conversant with the regulations, and stays up to date with all standards.
Small business owners, instead of ponying up the $100K, which may well be more than the annual revenues of the organization will constantly try to do it themselves, or worse, ignore regulations. Overworked government officials must then try to puzzle out and enforce conformance.
Larger businesses require more regulators, but in a vastly smaller proportion to their revenues.