When you submit an SBA 8a application, part of the process requires you to write a Narrative Statement of Social Disadvantage (Social Narrative). This only applies if you do not meet the meet the statutory presumption of being socially disadvantaged. Not all applicants require a statement of economic disadvantage.
Although you may have suffered socially, non-protected classes under the SBA 8a regulations can still be approved. However, compiling the details while still meeting the legal standard can be a difficult and confusing task. Understanding the basics can be helpful.
Social Disadvantage Basic requirement if needed by SBA: To meet the 8a Program eligibility requirements and to gain entry into the 8a Program, your social narrative must show that your business entity is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of “good character,” are citizens of the United States, and who can show the potential for business success. 13 CFR 124.101.
- The SBA has great deference in deciding the above issues
The presumption that you are socially disadvantaged can be challenged. If you are not part of the members that are presumed disadvantaged, you must write a narrative that shows that:
- You have at least one objective distinguishing feature that has contributed to your social disadvantage;
- You have personally experienced substantial and chronic social disadvantage in the United States because of that distinguishing feature; and
- The disadvantage has negatively affected your entry into or advancement in the business world. See 13 CFR 124.103(c).
Social Narrative Statement Topics
When writing a convincing a social narrative statement for 8a certification, meeting the legal definition of “socially disadvantaged” can be somewhat tricky. The SBA looks at applicants to see if they can be seen as someone who has been “subjected to racial or ethnic prejudice or cultural bias within American society.” 8a applicants must provide substantial detail about how your experiences impacted them. This is one critical area where 8a applicants fail.
To be sufficiently detailed, your SBA 8a social narrative statement of social disadvantage status must introduce the claim to generally describe:
- When and where the incident occurred;
- Who was involved;
- How the incident occurred; and
- How you were adversely affected by the incident.
Social Disadvantage Statement– Burden of Proof
The legal standard of showing your social disadvantage status that 8a applicants must meet is by “a preponderance of the evidence. When writing a social narrative statement you are not required to convince the SBA that an incident was motivated by bias. Instead, stick to the facts and details. Many 8a applicants have a hard time mustering the relevant facts.
- You want to include more detail than too little.
- Making conclusory statements will get your 8a application denied.
Supporting evidence is crucial. Your Social Narrative Statement of Social Disadvantage should only contain evidence sufficient to lead the SBA to conclude that more likely than not bias was a reason. Applicants should try to include as much corroborating evidence as possible. Affidavits, letters or reports can be beneficial.
- Your social narrative statement should be analyzed to see if your claimed chronic and substantial social disadvantage incident was brought about by the claimed bias. See Southern Aire, SBA No. BDP-453, at 12-13.
- To be socially disadvantaged, you must show “the quality and measure of evidence necessary to meet the preponderance of the evidence standard in supporting your case of social disadvantage.”
- Your social narratives do not need to prove social disadvantage along all three metrics. Instead, they should have a showing of negative impact caused by substantial and chronic bias in your employment history.
SBA sometimes makes mistakes. When evaluating your 8a application, the SBA is free to consider lack of corroboration while weighing the evidence. However, it cannot deny a claim simply because it has not been corroborated. SBA OHA has addressed this very issue on appeal.
- Evidence that has not been contested by the SBA must be accepted as true.
- Social narratives do not have to give conclusive proof of an event. However, the event must be presented in enough detail to be evaluated.
- Case law shows that the SBA has sometimes failed to apply the correct test for proving chronic and substantial bias
Discrimination Allegations in Social Disadvantage Narratives
Under SBA regulations, you can describe your discrimination experiences. However, you want to be very specific and factual. Writing general statements will not meet your burden of proof.
The SBA will use the “the totality of the evidence” standard to see if the experienced discriminatory practices in the areas of education, employment, or business history have had a negative impact on your entry into or advancement in the business world.”
The rules for writing an SBA Social Narrative Statement for Social Disadvantage status can become very complex.
- Most Narrative Statements of Social Disadvantage in 8a certification applications show some level of discrimination. When preparing your application, Social Disadvantage Statement must show the level of discrimination, consistent over a period of time, and should show that how the discriminatory acts prevented you from meeting a certain goal.
- You must speak to your experiences. If not, the SBA will deny your application.
Increase your chances of getting 8a certified and overcoming hurdles in getting small disadvantaged business certified by submitting a sound statement of economic disadvantage. Call our SBA 8a certification consultants 1-866-601-5518 for help with your SBA social narrative statement. FREE INITIAL CONSULTATION.