8a Small Disadvantaged Business & SBA SDB Certification
The Small Business Administration (SBA) identify socially disadvantaged individuals as people that have been subjected to “racial or ethnic prejudice or cultural bias.” National origins that are presumed to the socially disadvantaged are: African Americans, Asian Pacific Americans, Hispanic Americans, Native Americans and Subcontinent Asian Americans. Members of other groups may qualify if they can satisfactorily demonstrate that they meet established criteria.
To become a small disadvantaged business concern, economically disadvantaged individuals must meet the legal definition by showing that they have impaired access to financial opportunities has hampered the ability to compete in the free enterprise system when compared to people in similar businesses who are not identified as socially disadvantaged. You do not have to submit an application to SBA for SDB status.
To become an 8a disadvantaged business concern (SBA SDB certification) under SBA regulations you also must show that you are both socially disadvantaged and economically disadvantaged. SBA has now relaxed its requirements for narratives. Although companies may be self-certified, they must still be prepared to prove their status when challenged by a competitor and submit a small business self-certification statement.
At Watson & Associates LLC, our SBA8a certification consultants help small businesses to provide the SBA with relevant information to become small disadvantaged business SDB certified.
- We help companies to establish DBE and MBE ownership AND control requirements
- Our lawyers and consultants help 8a applicants to avoid SBA affiliation
- FLAT RATES AVAILABLE
Call us today for immediate help. 1-866-601-5518.
What are 8a Small Disadvantaged Business Enterprise Requirements?
- At least 51 percent unconditionally owned by one or more socially and economically disadvantaged individuals as set forth.
- Although companies can self-certify themselves as a small disadvantaged business, they cannot self-certify as 8a SBA SDB certified.
- Individuals claiming 8a small disadvantaged business status must be a citizen of the United States
- In assessing the personal financial condition of an individual claiming to be an SDB certified enterprise, and economic disadvantage, his or her net worth must be less than $750,000 after taking into account the exclusions set forth in 13 CFR 124.104(c)(2).
- For purposes getting SBA SDB certification, the applicable NAICS code is that which relates to the primary business activity of your company.
Some small business concerns think that if their company is state approved for Disadvantaged Business Enterprise status by their state or other entity, then they automatically become eligible for SBA’s certification. This is not so. Each federal agency’s definition and qualification requirements are different.
8a Disadvantaged Business – Other Socially Disadvantaged Individuals
According to the SBA, Other individuals may similarly be found socially disadvantaged and eligible for the program on a case-by-case basis.
An individual who is not a member of one of the presumed groups can be admitted into the 8(a) Business Development program. To do so, the business must prove to SBA that the individual(s) meeting SBA’s ownership and control requirements is socially disadvantaged. This process includes showing personal experiences where applicable in education, employment, and business history.
The individual must provide evidence to SBA proving one’s individual social disadvantage. Evidence of individual social disadvantage must include:
- At least one objective distinguishing feature such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged.
- Personal experiences of substantial and chronic social disadvantage in American society, not in other countries.
- Negative impact on the individual’s entrance into the business world or advancement in the business world because of the stated disadvantage(s).
See also information on SBA 8a annual report, SBA form 601 and SBA Form 1450.
Additional SBA SDB Certification Information to Get SDB Certified
- Potential for success not required for SBA SDB certification.
- Ownership restrictions for non-disadvantaged individuals. The ownership restrictions in 13 CFR 124.105 (g) and (h) for non-disadvantaged individuals and concerns do not apply for purposes of determining 8a Small Disadvantaged Business eligibility.
- Full-time requirement for SBA SDB Certification purposes. As a small disadvantaged business, you must manage your company on a full-time basis as the qualifying member. You have to work for the company during all of the hours the concern operates.
For help getting SBA SDB certified or for help with your SBA Section 8a certification application, call the 8a disadvantaged business consultants and attorneys at Watson & Associates, LLC. 1-866-601-5518. We offer a FREE INITIAL CONSULTATION.