This article explains the basics of the SBA 8a certification process, specifically: what is an 8a certification, what advantages of 8a certification are, how to apply for 8a and what eligibility criteria for the 8a program are.
What is an 8a certification
When someone says a company has 8a certification, this basically means that this business applied for the SBA 8a Business Development Program and was recognized eligible for the 8a certification by the government as it matches all the prerequisites of this SBA program.
Before we proceed to the 8a certification, let’s review what the SBA 8a Program is.
What is the SBA 8a Business Development Program
The SBA 8a Business Development Program is the governmental program run by Small Business Administration (SBA) to lend a hand to small disadvantaged businesses in receiving governmental contracts. Specifically, the annual goal of the Gov’t is to award at least 5% of all contracts to such companies.
What does ‘disadvantaged business’ really mean? Disadvantaged business is an organization which is unconditionally owned and controlled by one or more individuals that are defined by SBA as socially and economically disadvantaged.
Such individuals are either members of certain groups, for instance, African Americans, Native Americans, or Hispanic Americans, or are experiencing social disadvantage based on race, origin, gender, physical abilities and so on. In addition, such individuals must also have no economical advantage. Please see the exact 8a certification eligibility requirements further on.
8a Program benefits
Getting into the SBA 8a Program and qualifying for 8a certification requirements can end up being extremely lucrative. Specifically, small businesses owned and ruled by disadvantaged individuals receive certain privileges when submitting an SBA 8a program application. Such businesses can win set-aside governmental contracts (which means low competition limited to small businesses only) as well as sole-source contracts (which means virtually no competition).
Another privilege is a dedicated Business Opportunity Specialist provided by SBA to guide you through the entire process of SBA 8a application. There are also several training programs, as well as marketing and technical assistance provided to disadvantaged businesses on the pro bono basis.
In conclusion, being an SBA 8a certified business really pays off, so you definitely want to attempt to apply for 8a certification.
How to become SBA 8a certified
Before you can enjoy 8a certification benefits, you must qualify to the eligibility criteria of the 8a Program.
8a certification requirements
As we stated above, only small disadvantaged businesses can pass the 8a certification eligibility test. The exact criteria are as follows:
1. Small business
The program is for small market players only. Your 3-year average revenue must not exceed the certain threshold set by the government. You can check 8a program eligibility of your business here.
2. First time participant
Surely, if your business already enjoys 8(a) certification or have participated in the 8(a) program, you shouldn’t apply again.
Your company must be a disadvantaged business as we formulated above: a business owned and controlled (which in turn means at least 51% of ownership) by socially and economically disadvantaged individuals.
The economically disadvantaged individual is a US citizen whose average adjusted gross income for the past three years is $250,000 or less and the true value of his or her assets owned by this individual must not exceed $4 million.
4. Good character of the principal owner
This 8a qualification basically means the owner of the business should not have any criminal records, and should not have violated SBA terms before, should not be debarred or suspended, should not be incarcerated or otherwise related to guilty plea, conviction etc. Also, knowingly submitting false information for 8a registration is prohibited.
5. Potentially successful
The concern must show potential for success. This means your business should operate on the market for some time already (namely: two years), and mostly in the industry where you would like to win 8a government contracts. Obviously, your company must not be in debt and must have adequate capital and other capabilities (personnel, equipment etc) to process GSA contracts.
How to apply for 8a SBA certification
Before you can proceed with SBA 8a certification, you will need to register with the System for Award Management (SAM). This is the required step in order to log in to the certify.sba.gov. Getting the SAM account automatically means your business is officially registered, has EIN or TIN for paying taxes, and also has the DUNS numbers.
Note that prior to the registration process you should preliminarily gather all necessary governing documents of your business and any other documents required for 8a business certification. This includes but is not limited to: financial statements, copies of signed Federal personal and business tax returns, bank statements, personal history statements, and any additional documents SBA deems necessary to measure your eligibility.
When you are ready, check if your business is eligible for the 8a SBA Program with the above eligibility checklist, and then electronically submit your 8a certification application at certify.sba.gov.
Frequently Asked Question Regarding Federal Government 8a Certification
How long does it take to become SBA 8a certified?
Normally, 8a SBA certification process takes about 90-120 days on average. However, if the application had any inconsistencies or errors, certification may take much longer.
What length of time may a business participate in the 8a Program?
Once your business certification for the 8a Program completes, you can enjoy 8a Program benefits for nine years. However, you still need to confirm your disadvantaged status each year.
Can my SBA 8a application be denied?
Yes, sure. In fact, this happens pretty often. First of all, if your business does not qualify to 8a certification eligibility requirements your chances to become certified are thin. For instance, if your company if owned by less than 51% of disadvantaged individuals, your submission will be denied, no questions asked.
Also, SBA 8a certification applications are denied due to incomplete forms, inaccuracies or inconsistencies in the submitted data or if false data are submitted. The trick is that SBA 8a program requirements are very detailed and require patience to fill in everything correctly. Plus, SBA scrutinizes your submission thoroughly, so making a mistake here and there is a cakewalk. Needless to say, the SBA 8a application is denied then.
Can I reapply if denied?
If your application was rejected, you can officially submit a request for reconsideration to SBA. The time span to do this is 45 days. Note that you will need to provide other, previously non-submitted documents and statements proving that the initial SBA’s decision to decline your 8a certification application should be reconsidered.
If your application is nevertheless declined, you can reapply after no sooner than 12 months after your previous 8a certification application attempt.
How to become SBA 8a certified with fewer struggles?
If you are looking for an easier way to get your business 8a certified, you should hire a professional consulting firm that specializes on processing applications for governmental contracts. Such consultants usually know all 8a certification requirements in and out, know how to prepare 8a qualification document correctly so that the chance of approval would be near 100%. Sometimes, such firms can even take upon themselves the entire process of getting a GSA contract via the 8a Program, with minimum efforts from your side. Surely such 8a certification help is a paid service, but consider this:
- Professional agent ensures submission of all required documents in time, and also ensures each and every document is formatted as required by SBA. This minimizes the review time of your application.
- A consultant also communicates with the SBA officer and resolves any application-time questions that may arise, quickly and effectively.
- Hiring a firm also almost guarantees that your application will be accepted the first time you apply, so you do not have to wait a whole year for another attempt.
In conclusion, becoming SBA 8a certified is a great option for your business to run successfully. Overall amount of governmental contracts awarded to small business exceeds $30 billion, annually. Don’t stay aside, apply for 8a Business Development Program and become 8a certified now.