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Minority Owned Business
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Article 5: How To Qualify For The SBA 8(a) and SDB Programs
To qualify for the SBA 8(a) Business Development
Program and its Small Disadvantaged Business (SDB)
Certification Program, a business must be
majority (at least 51 percent) owned, controlled
and operated by a “socially and economically
disadvantaged individual.”
Groups that fall under this category include
African, Hispanic, Native, Asian Pacific and
Subcontinent Asian Americans. Although
woman-owned businesses aren’t necessarily
presumed to be disadvantaged, they may be
included if they can demonstrate that they are
disadvantaged because of gender.
Other qualification criteria include:
• The qualifying owner must be a U.S. citizen.
• The qualifying owner must have a personal net
worth of less than $250,000 (for the 8(a)
program) or $750,000 (for the SDB program),
excluding ownership interest in the business and
primary residence.
• The company must be profitable, in business
for at least two years (some exceptions are
occasionally made), and display reasonable
success potential and strong character,
experience and management ability on the part of
the owner.
• The company must meet the applicable size
standards for a small business as defined by the
SBA. (These vary by type of operation and
industry — contact your local SBA office for
details on your business and industry.)
• The qualifying owner must be engaged full time
in the daily management and operation of the
business.
Corporations and partnerships are eligible for
8(a) and SDB consideration, as long as they are
at least 51-percent owned by the disadvantaged
individual. Sole proprietorships are eligible if
they are 100-percent owned by the disadvantaged
individual. Non-disadvantaged individuals may
have part ownership in the business, so long as
it doesn’t exceed 49 percent.
There is no fee to apply for or participate in
the 8(a) or SDB Programs. The SBA generally
takes 15 days to review and 90 days (for 8(a)
Program) or 75 days (for SDB Program) to process
applications.
Applicants are notified by mail that they have
been approved or declined. Rejected applications
are returned with an explanation of why they
were declined, and these firms have 45 days to
make changes and request a reconsideration.
Qualification for the 8(a) Program automatically
qualifies a company for the SDB Program.
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