Eligibility Requirements

To qualify for the 8(a) program, a small business must be owned and controlled by a socially and economically disadvantaged individual; in other words, a disadvantaged owner must be involved on a full-time basis. Certain minority groups are presumed to qualify as socially disadvantaged and include African Americans, Hispanic Americans, Asian Pacific Americans, and Subcontinent Asian Americans.

However, an individual does not qualify automatically as socially disadvantaged just because he or she belongs to one of the named groups. SBA may challenge an individual's claim of social disadvantage if there is substantial evidence that the individual has not experienced, or has overcome, the traditional discriminatory social attitudes, racial prejudice and stereotyping that have created serious obstacles for many members of these groups when they attempt to obtain equal access to financing, markets and resources necessary to establish, maintain or expand small businesses.

Individuals who are not members of the named minority groups can be admitted to the program if they can show through a "preponderance of the evidence" that they are disadvantaged because of race, ethnic origin, gender, physical handicap, or geographic environment isolated from the mainstream of American society. The individual must demonstrate personal suffering and not merely claim membership in a non-designated group.

To qualify for the 8(a) program, a socially disadvantaged applicant must also be economically disadvantaged. In order to meet the economic disadvantage test, individuals must have a net worth of less than $250,000 for initial 8(a) eligibility, excluding the value of the business and personal residence. For continued 8(a) eligibility after admission to the program, net worth must be less than $750,000. This determination is made on the individuals and not jointly if spouses are involved. Separate personal financial statements on spouses are required.

Warning To receive the benefits of the 8(a) Program, a small business must be certified by SBA that it meets all of the requirements.

In determining economic disadvantage, the SBA will determine whether the applicant has suffered diminished credit and capital opportunities, based on the following: personal and business assets; personal and business net worth; personal and business income and profits; success in obtaining adequate financing, adequate bonding and outside equity credit; and other economic disadvantages.

Successful applicants must also meet applicable size standards for small business concerns, be in business for at least two years, display reasonable success potential and display good character. Although the two-year requirement may be waived, firms must continue to comply with various requirements while in the program.