The 8(a) Program is a business development program that gives small businesses an opportunity to excel in the federal market by competing for contracts that are mostly awarded to bigger and more established companies.
Becoming an SBA-certified 8a contractor is not as straightforward as it may seem. There are specific requirements set by the SBA that you must meet in order even to be considered for the job. And if you don’t meet them, then sorry, but you can’t be an 8a contractor—It’s really that simple.
But what are these requirements? What do they look for in potential contractors? What makes someone stand out from the rest of the pack? Is there anything that can disqualify you from being a contractor?
Do you have all of the above questions in your mind about the 8(a) Program? Well, you’ve come to the right place! In this guide, we will provide you with all of the information that you need to understand the requirements for this program. Keep reading to learn more!
10 Requirements for the 8A Contractor
The process of becoming SBA 8a certified can be tricky, but by meeting the following requirements, you can make it as simple and straightforward as possible.
1. Small Size Business
Small Business Administration. According to the SBA’s size guidelines and definition of a small business, a company that is “independently owned and controlled and which is not dominant in its field of activity” is considered to be a small business. According to the Act, the definition of a small business changes from sector to sector as needed to account for sectoral disparities.
The Small Business Act enables the SBA to help small businesses, promote free competitive enterprise, make sure that small businesses receive a fair portion of the Federal Government’s purchases, and preserve and improve the Nation’s economy.
2. U.S Citizenship
In order to be certified for SBA, you must be a U.S. citizen. The SBA requires applicants to provide proof of U.S. citizenship, such as a valid passport or certified copy of a birth certificate. Additionally, in order to receive certain types of Federal assistance, you may be required to demonstrate that you have resided in the US for at least three years prior to your application date.
3. More Than 51% Ownership of the Business
To become SBA certified, you must own at least 51% of your business. This ensures that you’re in control of the company and are committed to it. You’ll need evidence, such as corporate documents and tax returns, to back up this claim. Also, you must have held these majority shares for a minimum of two years before applying for certification.
Depending on the situation, you may be asked to provide more documents that confirm your business ownership. These could include a copy of the Articles of Incorporation or LLCs’ Operating Agreement. In some instances, two years’ worth of tax returns and bank statements might also suffice. Showing that you own more than 50% not only demonstrates your confidence in its success but also gives lenders comfort when extending credit.
4. Outside Business Interests Are Strictly Limited
If you have other businesses, it can cause problems because it means you aren’t focusing on your main business. The SBA has rules that state individuals cannot have other businesses if they want certification from the institution.
This implies that if somebody is running a certified business with the SBA, all their focus and attention must be going into ensuring its success—nothing else can interfere. Furthermore, this policy allows the SBA to confirm loans are being used correctly and fairly between approved businesses.
5. Socially Disadvantaged
You must meet the requirements for a socially disadvantaged individual to qualify for the 8a program. Socially disadvantaged people are those who have experienced racial, ethnic, or cultural discrimination in American culture because of their group memberships rather than because of their personal characteristics.
Socially disadvantaged groups that are automatically enrolled in the program under the Small Business Act include
- African Americans
- Native Americans
- Hispanic Americans
- Asian Pacific Americans
- Subcontinent Asian Americans
Applicants can be enrolled in the program as well If they show they have been disadvantaged because of
- Gender physical handicap
- Living circumstances
6. Socially Disadvantaged Board Control
Only those who are disadvantaged person can exercise board control of a company. This is because they need to be certified by the SBA. Board control refers to a board member’s ability to influence decisions made by other members of the company. Although it can be used for both constructive and destructive reasons, it’s critical that only learned individuals with positive records have this power.
7. Economically Disadvantaged
The Small Business Administration (SBA) provides assistance to businesses that are struggling. If you want help from the SBA, your business must be certified as economically disadvantaged. This term refers to a business that is not doing as well as competing businesses. For the 8(a) program specifically, all applicant individuals must have a net worth of $250,000 or less—not including their business or personal residence values in this total.
8. No Pending Federal or State Tax
The SBA won’t certify you if you have any serious financial issues with the government — meaning all tax payments must be up to date, without any late fees or anything similar. You’ll also need to demonstrate that your business is legitimate by registering it with the state and other relevant government agencies.
9. Business Must Be Eligible for 8a Certification
To become SBA 8a certified, your business must abide by all state and county guidelines. For example, obeying taxation, zoning, and other license laws and regulations. If your business does not adhere to these rules, it will be taken off the list of certified businesses, and consequences could follow.
10. Good Moral Character
SBA certification requires that you be a person of good moral character. This includes being honest, having integrity, and respecting the law. You must also have a record of reliable performance in both your personal and professional life. Financial responsibility is key here, which means having a clean credit history and paying your bills on time.
Get the Best 8(a) Construction Services With Valet Works
Valet Works is the best construction company around, and we’re certified 8(a) to prove it. We provide all the design, build, and development services you could need for new developments, renovations, restoration, and roofing projects. With Valet Works taking care of things, you’re guaranteed high-quality results that you’ll be happy with!
We are your one-stop destination for precision 8(a) developments carried out by experienced specialists. We always work within your budget and take pride in our commitment to client satisfaction–which is why Valet Works should be your #1 choice. Contact us today for more information about how we can help you!