There are many tools and programs available to help small businesses succeed. One popular program is the Small Business Administration’s 8(a) Certification.
In a nutshell, the 8(a) Business Development program was designed to give small disadvantaged businesses the support they need to compete in federal and private sector procurement markets. While the program does not guarantee a firm will win contracts or be successful, businesses that participate in the 8(a) program gain valuable experience and assistance that could make the difference between success and failure. Unfortunately, 8(a) Certification is not for everyone. There are a handful of eligibility requirements to exclude all but the neediest businesses.
First, the firm must be owned and controlled by one or more socially and economically disadvantaged individuals. A socially disadvantaged status is presumed when the subject has been subjected to racial or ethnic prejudice or cultural bias because of their identification as a member of certain groups without regard to their individual qualities. Groups that are presumed to be socially disadvantaged include African Americans, Hispanic Americans, Asian Pacific Americans, Native Americans and Subcontinent Asian Americans. Other groups may also be eligible if they can show through a preponderance of the evidence that they are disadvantaged due to their race, ethnicity, gender, physical handicap or having lived in an environment isolated from the mainstream of American society.
Eligibility for 8(a) certification also considers economic factors. The 8(a) Business Development program was not designed to cater to individuals who have already accumulated significant wealth. Therefore, only those individuals whose net worth is less than $250,000 may participate.
Additionally, those persons or principles used to determine social and economic status must also be majority owners of the business applying. The individuals whose status is being used as a basis for eligibility must also be engaged full time in the daily management and operation of the business being considered for 8(a) certification.
Other requirements set by the SBA are that all 8(a) applicants must be US citizens, meet SBA small business size standards, have a DUNS number and EIN (required for SAM registration),demonstrate sound management and technical experience in their industry, have been in business for at least two years and be of good character.
These eligibility requirements are only the general requirements to participate in the 8(a) program. Other criteria may also be used when determining a firm’s application for the certification. To get more information about the SBA’s 8(a) certification program, interested small businesses should visit the SBA’s website.