The SBA requirements for 8a certification force applicants to consider a vast amount of personal and business information. To obtain your 8a certification status, you must meet very specific SBA requirements. Failure to meet them will cause suspicion and rejection. Many small businesses go through the application phase only to find out that they are not fully aware of the legal standards and level of information that the the SBA looks for in each 8a application.
To increase your chances of getting approved for 8a status, you must convince the area office that you meet the basic SBA 8a requirements. Failure to do so will cause your 8a application to be denied.
What are the SBA 8a Certification Application Requirements?
To become eligible, company in its SBA 8 a application must meet the basics identified below.
- In your SBA 8a application development, you must be a small business concern based on applicable size standards for small businesses in your industry.
- All individuals upon whom eligibility is based must be U.S. citizens.
- You must be the unconditional majority business owner.
- Outside business interests are strictly limited.
- You must work full-time in your business.
- You must be in immediate charge of your business.
- Board control in the case of a small business corporation can be exercised only by disadvantaged persons.
- To get your 8a status, you must be a socially disadvantaged individual. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control. Under the Small Business Act, certain presumed groups include African Americans, Native Americans, Hispanic Americans, Asian Pacific Americans, and Subcontinent Asian Americans. Other individuals can be admitted to the program if they can show evidence that they are disadvantaged because of race, ethnicity, gender, physical handicap, or residence in an environment isolated from the mainstream of American society.
- Ultimate control of your company must not reside with anyone other than those upon whom eligibility is based.
- You must be an economically disadvantaged person. For the 8(a) program this means all applicant individuals must have a net worth of $250,000 or less, excluding the value of the business and personal residence.
- You must be in business for at least two years or apply for a waiver of the two-year requirement.
- You must not have any significant unresolved federal or state tax financial issues.
- You must be of a good moral character to be approved for 8a status.
- You must not run a business that is not eligible for certification.
SBA 8a Requirements and Business Owner Qualifications
8a certification application requirements mandate that an 8a company must be owned, controlled, and operated by people who are socially or economically disadvantaged. This could be one or more persons who are owners and meet the SBA evaluation standards.
SBA 8 a Application — Business Qualifications and Corporate Issues for How to Become 8a Certified
When considering whether your SBA 8a certification requirements and evaluation criteria are completed for your 8 a application, you must assess whether you are selling services or products that the government buys.
- Corporate documents must conclusively show that the eligible owner(s) make the final business decisions.
- Contracts with third parties that appear to give them control over the company can disqualify you.
Never make the mistake of thinking that your 8 a application will be approved if your company shows unsuccessful performance history. In fact, your 8a application will be denied because you show no likelihood of success. This cannot be appealed.
SBA 8a application requirements want you to demonstrate that your business can demonstrate a minimum of $250,000 in gross sales for the previous year.
Previous contracting experience with state or federal agencies is preferred. However, having an experienced 8a certification application development consultant can be helpful in explaining any lack of experience.
SBA 8 a Application Requirements – Net Worth and Financials
Your personal net worth should not be over $250K. SBA certification application and 8a qualifications requirements consider an assessment of all your cash, bonds, stocks, savings and checking accounts, automobiles, etc. If you are not sure, you may want to invest in an accountant to check these financial details.
Although you have to disclose 401-Ks and retirements, they are not considered for personal net worth to get your 8a status.
Areas to watch out for when assessing requirements for 8a certification – eligibility evaluation factors. The biggest threat to meeting SBA 8a requirements is when the SBA determines that you do not have the potential to succeed. Unless an 8a certification appeals lawyer can show that the SBA acted in bad faith or clearly abused its discretion, this aspect of SBA requirements cannot be appealed.
For help with how to become 8a certified and to make sure get your SBA 8a requirements completed, call our 8 a application consultants at 1-866-601-5518.