SBA 8a Certification
The Federal Government created the Small Business Administration (SBA) in 1953. The SBA created the 8a certification program in the 1960s. The 8a certification program allows small disadvantaged businesses an opportunity to obtain business within the federal procurement market. The SBA runs the 8a program which is also known as the SBA 8a.
Who can apply for an 8a Certification?
Not everyone can apply for 8a certification. US citizens of Hispanic, Asian, African, or Native American descent can apply. Other eligible groups include those who have experienced discrimination. They include those with disabilities, certain veteran status (i.e. Vietnam War), gender, and other factors. If an applicant does not fit in the aforementioned categories, they must then provide proof of discrimination.
51 or more percent of an 8a certified business must be owned by the applicant. The applicant must have the highest title in the company and run the day-to-day operations. Applicants have to be of good character and divulge any criminal background. The SBA validates the criminal background information with the Federal Bureau of Investigation (FBI). All income tax, student loans, and other obligations must be paid before applying.
The SBA evaluates all applications with the goal of growing businesses from startups to multi-million businesses. Companies achieve those goals by winning awards up to $4 million for goods and services and $6.5 million for manufacturing. Companies are allowed to participate in a developmental stage which last 4 years and a transitional stage for 5 years. The goal is to get companies to “graduate” so they can thrive without the preferences of 8a certification.
Businesses must have stability and show the ability to succeed. A company must be in business at least two years and have three months of working capital in the bank to make payroll and other expenses. The owner must have a net worth under $250,000 (excluding personal home). Income tax returns from two consecutive years and business plans have to be submitted and reviewed. The applicant has to be the highest paid person in the company but not make “excessive withdrawals” of almost all the money in the company. The business can not rely on one client for most of its revenue. If the biggest client is lost, then the business would suffer. The SBA emphasizes stability. Complying with 8a requirements is not easy but there are significant advantages in the bidding process if a company can comply.
Contact Us Today about your 8a Certification?
Contact an 8a certification attorney at Kleiner & Cazeau regarding any 8a certification matters. Our attorneys can be reached by phone at (305) 517-1392 ext: 102 or by e-mail using our contact form. We are ready to help you obtain your 8a certification.
