The Small Business Administration may deny your SBA 8a application for several reasons. A common problem occurs when the SBA requests more information as a precondition of admission to the 8(a) Business Development Program.
When the SBA tells you that your 8a application is incomplete and requests more information, your application is pending submission of acceptable information. Without supplying the additional information, the SBA will deny your 8a status.
Sometimes the SBA will again ask you to supplement your 8a application with addition information. It does not have to keep asking you until you get it right.
Common Mistakes in SBA 8a Application Process
When it comes to getting your 8a application approved, there are a few common costly mistakes that we see on a day-to-day basis when applicants go through the process.
Failure to prove disadvantaged status. First, the SBA will rule your application unacceptable because you have not demonstrated that you were disadvantaged pursuant to 13 C.F.R. §124.103.
To get your 8a application approved , you must meet the requirements for admission to the Program by demonstrating that you qualify as a small business and “is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States, and which demonstrates potential for success.”
Evidence of substantial and chronic social disadvantage is generally established if you, the 8a applicant, adequately describe “more than one or two specific, significant incidents.”
However, one incident may be enough if it is so substantial that there is no doubt you suffered social disadvantage.
Getting your 8a application approved is very fact-specific. You cannot simply make general statements about educational experiences but you have to also show the result. For example, under showing education as the basis for social disadvantaged status, you cannot make conclusion that teachers of student made comments. You also have to show that as a result of those comments “something happened, or did not happen.”
8a application based on a disability. As part of your justification for social disadvantage status, you can present a physical disability as a distinguishing feature that may contribute to social disadvantage. 13 CFR 124.103(c)(2)(i).
A problem often seen the SBA 8a application process is lack of facts and specific personal experiences of substantial and chronic disadvantage. As consultants, we highly recommend that you describe more than one or two specific, significant incidents. Your application should also link the disability to the result – ability to get business or decline in revenue. You should not leave it up to the SBA to deem it as coincidental. It will deny your 8a application.
Affidavits should also contain facts. A costly mistake made is most 8a applications is that many of the supporting affidavits also contain facts. If you cannot make general comments, then an affidavit that supports your position also cannot contain general assertions.
- Facts, details and examples are what help you get your 8a certification approved.
- Overwhelm the SBA with examples and detail
- Be aware of sba 8a online application denials
Common application problems due to business relationships.
Even if you meet the basic 8a eligibility requirements, the SBA can still deny your 8 a application into the Program if you have an immediate family member who is or has been a participant in the 8(a) BD Program. The relevant regulation states:
Ownership of another Participant in the same or similar line of business: (1) An individual may not use his or her disadvantaged status to qualify a concern if that person has an immediate family member who is using or has used his or her disadvantaged status to qualify another concern for the 8(a) BD Program.
On appeal, an SBA 8a certification appeal lawyer can ask SBA OHA to waive this prohibition if the two concerns have no connections, either in the form of ownership, control or contractual relationships and provided the person seeking to qualify the second concern has management and technical experience in the industry.
Where the concern seeking a waiver is in the same or similar line of business as the current or former 8(a) concern, there is a presumption against granting the waiver.
The applicant must provide clear and compelling evidence that no connection exists between the two firms. See 13 CFR 124.105(g) (1). SBA OHA realizes that the terms of this regulation are permissive rather than mandatory.
Burden of Proof for 8a certification eligibility. An applicant seeking entry into the 8(a) BD Program bears the burden of proving its eligibility by a preponderance of the evidence in the administrative record.
In order to increase your chances of getting your 8a status, you can also submit various types of evidence including email, videos or online proof. The SBA must consider the evidence you provide, unless it has a published policy that states it will not accept certain types of evidence.
Read your 8a application denial letter carefully. The SBA’s first Determination Letter should give you insight to what evidence should be supplemented in a request for reconsideration. The SBA letter cannot make broad conclusory statements. Instead, the letter must include the Agency’s reasoning for finding that no social disadvantage occurred or any other reason for denial.
Requests for Reconsideration must overcome the original SBA concern in your 8a application.
As 8a certification consultants, we understand the law is not always conclusive. We advise our clients to focus on providing facts that also divert away from situations where the SBA has great discretion.
For help with your SBA 8a applications call us at 1-866-601-5518. Free Initial Consultations.