How to Apply for the 8(a) Business Development Program
The program is open to small businesses at least 51 percent owned by socially and economically disadvantaged individuals, including:
The federal government’s goal is to award at least five percent of all federal contracting dollars to 8(a) certified businesses. Program participants 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 valuable resources to participating small businesses. By following these steps, you can determine whether your business is eligible for the program and learn how to get certified.
5 Steps to Applying for the 8(a) Business Development Program
1. Check If You Are Eligible
The Small Business Administration (SBA) has created a checklist of eligibility requirements to be considered for the program. You can also determine if you qualify for the program on the SBA’s Certify website. In addition to meeting the ownership and financial criteria, you must demonstrate how you’re a socially disadvantaged individual. In other words, you’ll need to show how your personal experiences have affected your ability to succeed in business.
Certain businesses won’t qualify, including franchises, non-profit organizations, brokers and packagers, and businesses owned by other disadvantaged firms.
Also, it’s important to note that if you’ve participated in the program previously, you won’t qualify. In addition, you won’t be eligible for the program if you don’t have good character (as defined by the SBA).
2. Meet the Two-Year Rule
The SBA uses the time you’ve been in business to gauge potential success. The SBA requires businesses to be open for two or more years to participate in the program. They have his requirement because many companies fail in the first two years of operation.
The easiest way to prove that you meet this requirement is to submit your two most recent federal tax returns. You’ll need to submit a waiver request if you only have one year of business tax returns.
3. Gather More Information
Next, the SBA will require you to take an online training and self-evaluation course. This helps them determine if you’re ready to apply for the 8(a) Program. You can also contact your local SBA office to verify that you’re prepared to submit the documentation and forms.
4. Apply to Get Certified
Your application to be certified as an 8(a)-business can be submitted online to the SBA. Additionally, you may be required to mail signed hard copies. Although you can submit a printed application, the SBA recommends submitting an electronic application to expedite the process.
Initially, the SBA will review your application for completeness, and you have 15 days to provide additional information if requested. Once the application is 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. This plan must be approved by an SBA Business Opportunity Specialist (BOS) before you’re eligible for program benefits. It should include the following:
- An analysis of market potential
- Evaluation of your strengths and weaknesses as a program participant
- Specific goals for business development
- A transition management plan
- Estimates of future contract awards
In addition, you should review your approved business plan with your SBA BOS. Then, forecast your needs for annual 8(a) Program contracts for the following year.
Conclusion: Small Disadvantaged Businesses Can Benefit from the SBA 8(a) Program
Although becoming 8(a)-certified can be lengthy, participating in the program may be beneficial. If you think you meet the prerequisites, start by contacting your local SBA office to establish a relationship. They can help you compile the appropriate documentation and application forms.
Lastly, if the SBA rejects your application, ask for feedback. It may improve your chances of being approved the next time you apply.
Editor’s Note: This post was updated for accuracy and comprehensiveness in June 2022.
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.