Small businesses in order to win federal contracts need to obtain 8a certification from the United States Small Business Administration (SBA). However, the SBA’s eligibility requirements for 8a certification are perplexing and confusing. Not all small businesses can qualify for the certification. To minimize the confusion and help the small businesses determine if the 8a Business Development Program is for them, given below are seven eligibility requirements for 8a certification. If a small business meets all these requirements, it will obtain the certification.
The entrepreneur should be a member of any of the following groups in order to qualify for SBA 8a certification.
- Hispanic American
- Black American
- Asian American
- Native American
If the entrepreneur doesn’t belong to any of these above mentioned groups but has been able to prove the SBA that he/she had to undergo a lot of sufferings in the American society because of the discrimination based on disability, gender, veteran status or culture, then also the individual would be considered as a socially disadvantaged.
The owner of the business should not have a personal net worth of more than 250,000 dollars. The market value of all the assets he/she has should not go beyond 4 million USD. Although the applicant must be the highest paid employer in the company, his/her salary should be reasonable in proportion to the firm’s annual gross revenue. The individual’s average adjusted gross income should not be more than $200k.
The firm needs to be a small business as per the size standards of Small Business Administration. The size standard is expressed either in terms of gross revenue or in terms of persons working in the firm.
An economically and socially disadvantaged individual should have the unfettered, full control of the firm. He/she should be completely involved in both daily operations and strategic decision making. This individual also needs to hold the most powerful and top designation in the organization.
The socially and economically disadvantaged person (s) should own fifty-one percent or more of the firm. A business may also qualify for SBA 8a certification if it’s owned by an Alaska Native Corporation, an Indian tribe, a Community Development Corporation or a Native-Hawaiian Organization (NHO).
The company applying for the 8a certification should have at least two years of experience in business in order to qualify the eligibility test. However, sometimes it is seen that businesses, which has not been in operation for two years also qualified for the certification. In that case, those companies need to show many documents to the SBA.
Entrepreneurs who want their businesses to get 8a certified should not have any records of felony conviction, past arrests or detainments by police. Having a good character is essential.
So, do you and your business qualify for the 8a certification. The SBA is very strict when reviewing the 8a application. It analyses and reviews each and every application thoroughly. Not being qualified enough for the certification will cause your application to be rejected by the SBA.
Adriana Sopi is a business consultant. She advises small businesses on 8a certification, HUBZone certification and other SBA certifications helping a small firm to grow. She even writes articles and blogs on these topics. Here she writes about all the eligibility requirements of small businesses for getting an access to the federal contracts.