SBA 8(a) Program & Eligibility Requirements: A Guide For Small Businesses
For almost a decade, the Small Business Administration's 8(a) program has helped economically disadvantaged businesses qualify for assistance. Keep on reading to find out more about this program.
Are you a small disadvantaged business in search of government contracts? The SBA 8(a) program might be right for you.
In this article we’ll define the “socially and economically disadvantaged individuals” requirement for SBA 8(a) federal certification, as well as provide other SBA 8 (a) application and eligibility information. Plus, you will learn about the benefits of the SBA 8(a) business development program and government contracting program.
Read on to find out more.
Table of Contents
- What Is The SBA 8(a) Program?
- Does Your Small Business Qualify For SBA 8(a) Certification?
- How To Apply For The SBA 8(a) Program
- FAQs About SBA 8(a) Business Development
- Is The SBA 8(a) Program A Good Match For Your Small Business?
What Is The SBA 8(a) Program?
The SBA 8(a) program is a nine-year program to help small socially and economically disadvantaged businesses qualify for federal contracts and other assistance. SBA 8(a)-certified small businesses will receive government contracting preferences, in addition to technical assistance and training.
SBA 8(a) Business Development Program Overview
The SBA 8(a) program is for a very specific type of business. To be a good candidate for the SBA 8(a) program, you must operate a minority-owned business that manufactures or sells something the federal government buys. This is a program for businesses looking to qualify for federal contracts.
Additionally, your business must be classified as small (in accordance with your primary North American Industry Classification System (NAICS) code), and the owner(s) must have limited financial means in terms of their net worth, income, and total assets. If you meet all these qualifications and become certified, your business will receive training to become more competitive and could be awarded federal contracts.
Keep in mind that the program is pretty exclusive, and even if your business is SBA 8(a) certified, this doesn’t guarantee you will win any federal contracts. Per the SBA Certify website, only 610 businesses were approved for the 8(a) Program in 2021, and there were only 4,910 active 8(a) Program participants at the end of 2021. Still, it’s a good idea for eligible businesses to get SBA 8(a) certified, as the program comes with certain benefits.
8(a) Program Benefits For Eligible Small Businesses
The main benefit of the SBA 8(a) program is it increases your likelihood of winning federal contracts. However, there are other benefits to 8(a) certification, too. Even if your firm isn’t ready to contract with the federal government, the SBA 8(a) program can help you get there.
- Access To Competitive Contracts: The federal government has a goal of awarding at least 5% of federal contracts to small disadvantaged businesses every year, and 8(a) certification is how you officially designate your business as being part of this eligible 5%. Through the program, you may be able to access both sole-source and competitive set-aside contracts.
- Business Development Assistance: This includes one-on-one assistance from Business Opportunity Specialists to help you grow and achieve your business objectives over your nine-year term.
- Connect With Experts: Through SBA 8(a), you can connect with experts in the areas of federal procurement and compliance who can assist with meeting government contracting regulations.
- Connect With Established Businesses: With SBA 8(a) certification, you can receive mentorship from experienced firms through the SBA Mentor-Protégé program. You can even pursue a joint venture with a mentor so you can increase your capacity and compete together for government contracts.
- Qualify For Federal Surplus Property: Through the SBA 8(a) program, you can qualify to receive federal surplus property on a priority basis.
- Free Training: Your business will also receive free training from SBA’s 7(j) Management and Technical Assistance program.
Does Your Small Business Qualify For SBA 8(a) Certification?
To qualify for SBA 8(a) certification, your business must be at least 51% owned and controlled by socially and economically disadvantaged individual(s). You must also meet certain other criteria, including:
- You operate a small business in the United States
- You are a US citizen.
- Your company manufactures or produces something that the federal government purchases–for example, IT solutions or mechanical engineering services with military applications.
- Your business has a good track record and has been in operation for at least two years.
- Your business is generating revenue.
- You can demonstrate good character and the ability to perform well on contracts.
Don’t meet all the qualifications for 8(a)? You might still qualify for an SBA loan.
Check out our complete guide to SBA loans where we explain everything you need to know.
Who Are Socially & Economically Disadvantaged Individuals?
Socially and economically disadvantaged individuals are non-White small business owners who also have limited financial resources. Specifically, here’s what that means:
- Socially Disadvantaged Individuals are small business owners who are Black American, Native American, Hispanic American, Asian Pacific American, or Subcontinent Asian American.
- Alternatively, the business is owned by an Alaska Native corporation, Community Development Corporation, Indian tribe, or Native Hawaiian organization.
- Alternatively, the business owner can prove they are socially disadvantaged in another way, such as having a physical handicap.
- Economically Disadvantaged Individuals are small business owners who have a personal net worth of $750,000 or less, adjusted gross income of $350,000 or less, and assets totaling $6 million or less.
What Does It Mean To Be 8(a) Certified?
What is 8(a) certification? Being 8(a) certified means that your business is now part of the SBA 8(a) program and is eligible to start receiving the benefits that the program provides. Your term will last nine years. Once certified, your profile in the System for Award Management (SAM)—the official government website for contract opportunities—will display your approval date and exit date for the 8(a) program.
Maintaining 8(a) Eligibility & Certification
After your business becomes 8(a) certified, you will need to maintain your certification by verifying your eligibility once a year. This means that there will be an annual review each year, during which you will submit the requested information to your servicing SBA District Office. The SBA will use this information to verify that your business meets statutory and regulatory requirements.
How To Apply For The SBA 8(a) Program
Applying for SBA 8(a) certification is a multi-step process. Fortunately, it isn’t too difficult. This section will go over the main steps to complete an SBA 8(a) application. You can also find this information and more at the 8(a) application website (certify.SBA.gov).
FAQs About SBA 8(a) Business Development
Is The SBA 8(a) Program A Good Match For Your Small Business?
The SBA 8(a) program is a good match for certain small businesses: small, minority-owned businesses in search of government contracting jobs.
If your business doesn’t meet SBA 8(a) eligibility requirements, you can learn more about other funding opportunities, such as SBA loans and other small business loans. For example, you can check out our picks for the best small business loans.
Interested in SBA loans? Some other resources that might interest you include our articles on the best SBA lenders for veterans and three types of SBA loans you might qualify for.