SBA’s 8a Eligibility Requirements

If you are a small business owner and are considering applying for the SBA 8(a) program, here are some key eligibility requirements and pointers to help you before you invest time into the application process.

First and foremost the SBA 8(a) program only certifies firms that are currently in business. In order to apply you must be the majority owner and also involved full time in the day-to-day management of the business to meet eligibility requirements. If you meet these requirements the next key point to consider when applying is the two year business operation requirement. The 8(a) program requires applicants to be in business for at least two years before their application will be considered for approval.Exceptions to this rule are sometimes granted but are not guaranteed. If you have been in business for less than two years and have successfully generated profits (this does not mean you have to been making huge profits), and have a successful track record with contract completion a waiver can be requested.

Only applicants who are members of socially disadvantaged groups and are economically disadvantaged can be considered for approval to the program. Many 8(a) applicants become ineligible for 8(a) certification due to the $250,000 net worth limit.This limit is defined as a personal net worth of $250,000 or less, excluding the equity in a personal residence or business.It is crucial not to make attempts at hiding assets from the SBA. The SBA has an extensive amount of tools and knowledge base regarding determining the size of a business and looking at two years tax returns to know what an individual’s net worth may be.

It is crucialfor the SBA that as a small business owner you have enough working capital and business contracts that they deem your business eligible to have a high likelihood of success. Some planning can be done to mitigate this problem if the individual’s net worth is close to $250,000, such as selling securities and investing the money in the primary residence. Unfortunately for individuals with extremely high net worth’s it is difficult or unlikely to work around this clause in the SBA application.

Finally only applicants who are US citizens are eligible to apply for the 8(a) certification. Each year the federal government sets aside millions of contract dollars for certified small businesses to bid and receive contracts relating to the many federal agencies that exist. Many federal contracts are "set aside" for 8(a) firms, meaning that only certified businesses may apply or be considered. The designation of SBA 8(a) is a highly regarded program, if you meet these requirements you should consider pursuing this designation for your small business.

Author Bio :

The author of the article has an extensive experience in the field of 8a certification and sba certification