How to Apply for the 8(a) Business Development Program | Fora Financial
How to Apply for the 8(a) Business Development Program
October 01, 2018

How to Apply for the 8(a) Business Development Program

If you’re a small business owner competing for government contracts, you may be familiar with the 8(a) Business Development Program, which is sponsored by the federal government to level the playing field for eligible disadvantaged small businesses. The program is open to small businesses that are at least 51 percent-owned by economically and socially disadvantaged individuals, including minorities, women, members of the LGBT community, veterans, and people with disabilities.

According to the U.S. Small Business Administration (SBA), the federal government’s goal is to award at least five percent of all federal contracting dollars to 8(a)-certified small businesses. Participants in the program can receive sole-source contracts worth up to $4 million for goods and services and $6.5 million for manufacturing. Additionally, program participants can partner with other eligible businesses to further their ability to compete in the American economy.

The 8(a) Business Development Program offers a host of valuable resources to participating small businesses. By following these steps, you can determine whether your business is eligible for the program—and if so, how to get certified.

5 Steps to Applying for the 8(a) Business Development Program

1. Check Eligibility

The SBA has created a checklist of qualifications to be considered for the program. You can also check your eligibility on the SBA’s Certify website. In addition to qualifying as a small business and meeting certain ownership and financial criteria, you must demonstrate how you’ve been socially disadvantaged. In other words, you’ll need to show how your personal experiences have affected your ability to succeed in business.

Certain types of businesses are excluded from applying, such as franchises, non-profit organizations, brokers and packagers, and businesses owned by other disadvantaged firms. Additionally, if you’ve participated in the program before or have demonstrated a “lack of character” as defined by the SBA, your application won’t be approved.

2. Meet the Two-Year Rule

The SBA uses the length of time you’ve been in business as a gauge of potential success. Since many businesses fail in the first two years, the SBA requires that applicants have two or more years in business to participate in the program.

The easiest way to show that you’ve been conducting business in your primary industry for at least two full years is to submit copies of your two most recent federal tax returns. If you only have one year of business tax returns, you’ll need to submit a waiver request.

3. Gather More Information

The SBA encourages applicants to take an online training and self-evaluation course to help you determine whether you’re ready to apply for the 8(a) Program. You can also contact your local SBA office to answer any questions and ensure that you’re prepared to submit the necessary documentation and forms.

4. Apply to Get Certified

Your application to be certified as an 8(a)-business, including any supporting documentation, can be submitted electronically to the SBA. Additionally, you may be required to mail signed hard copies. While you can submit your entire application in hard copy format, the SBA recommends you take advantage of their electronic application to expedite processing.

Your application will initially be reviewed for completeness, and you have 15 days to provide additional information if requested. Once the application is considered complete, the SBA typically makes its final decision regarding 8(a) Program eligibility within 90 days.

5. Create a Business Plan

Once you’re certified, you’ll need to submit a business plan that must be approved by an SBA Business Opportunity Specialist (BOS) before you’re eligible for program benefits. The submitted plan should include an analysis of market potential; an evaluation of your strengths and weaknesses as a program participant; your specific targets, objectives and goals for business development; a transition management plan; and estimates of future contract awards. Additionally, you’ll have to review your approved business plan with your SBA BOS and forecast your needs for 8(a) Program contracts for the next year on an annual basis.

Although the process to become 8(a)-certified can be lengthy, participating in the program may be game-changing for your small business. If you think you’re eligible, start by contacting your local SBA office and establishing a relationship — they can help you get organized so that you have the appropriate documentation and application forms. Lastly, if your application happens to be rejected, ask for feedback. It may improve your chances of being approved the next time you apply.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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