Myth 1 : I can’t get certified if a family member is already in the program
The SBA has a waiver, which can be granted if the two firms are located in and market to a different territory or if they are in different industries.
Myth 2 : A majority of my sales must come from the private sector or I will lose my certification
The SBA has business mixed targets that your firm must meet in the ‘Transitional years’—years five to nine of its certification. In the years 5-9 you must have 15-55% of your sales from the private sector. If you fail to meet these targets you could lose your ability to perform on sole source 8a contracts. Automatically if you don’t make good faith efforts to correct this business mix target, you could lose your certification.
Myth 3: A firm cannot get certified unless it’s been in business for at least two years
The SBA has a waiver, which can be granted to firms that are wanting to obtain the certification sooner than two years. Typical requirements are that:
• The owner has a significant business background and has a significant technical background in the industry of the applicant concerned.
• The firm has successfully performed on at least one federal contract
• The firm has a potential for success indicated by income, profit and the firm must have at least one tax return.
Note a two year waiver is not needed if the only reason the firm is less than two years old is that it has an entity type change. For example, from a sole proprietorship to a corporation.
Myth 4 : A firm cannot get certified if it’s had a prior application rejected by the SBA
The SBA rejects 70% of 8a applications for a lack of completeness. Having your application rejected on its first attempt is very common.
Myth 5: An 8a certification isn’t that beneficial for my business
In 2011 8a certified firms received 18.4 billion dollars in federal contracts. This represents 2-3 million dollars in additional annual revenue per 8a certified firm.
Myth 6 : A company should be a well established mid-tier business before applying for the 8a certification
The SBA has a waiver, which can be granted if the two firms are located in and market to a different territory or if they are in different industries.
Myth 2 : A majority of my sales must come from the private sector or I will lose my certification
The SBA has business mixed targets that your firm must meet in the ‘Transitional years’—years five to nine of its certification. In the years 5-9 you must have 15-55% of your sales from the private sector. If you fail to meet these targets you could lose your ability to perform on sole source 8a contracts. Automatically if you don’t make good faith efforts to correct this business mix target, you could lose your certification.
Myth 3: A firm cannot get certified unless it’s been in business for at least two years
The SBA has a waiver, which can be granted to firms that are wanting to obtain the certification sooner than two years. Typical requirements are that:
• The owner has a significant business background and has a significant technical background in the industry of the applicant concerned.
• The firm has successfully performed on at least one federal contract
• The firm has a potential for success indicated by income, profit and the firm must have at least one tax return.
Note a two year waiver is not needed if the only reason the firm is less than two years old is that it has an entity type change. For example, from a sole proprietorship to a corporation.
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| 7 Common Myths About The 8a Certification |
The SBA rejects 70% of 8a applications for a lack of completeness. Having your application rejected on its first attempt is very common.
Myth 5: An 8a certification isn’t that beneficial for my business
In 2011 8a certified firms received 18.4 billion dollars in federal contracts. This represents 2-3 million dollars in additional annual revenue per 8a certified firm.
Myth 6 : A company should be a well established mid-tier business before applying for the 8a certification
The SBA will certify firms with as little as $100,000 a year in annual revenue. Once certified, the SBA gives the firm the ability to enter into: joint venture and mentor protégé agreements with large federal contractors. These relationships enable the 8a certified firm to greatly increased growth by providing them with expertise, bonding, insurance, financial capabilities and other assistance.
Myth 7 : I must be a 100 % member of a minority group in order to prove SBA that I am socially disadvantaged
If an individual can show a 25% or more blood lineage to a presumed disadvantaged minority group like Hispanic American, African American, Sub-Continent Asian, Asian Pacific American or a Native American, he/she can qualify for an 8a certification. In some cases, the SBA will ask for additional supporting documentation to show that you represent yourself as a member of that presumed group in American society.
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