Are You Eligible For The Minority Business 8a Certification Program?

The minority run enterprises in the United States of America have grown in numbers in the last decade yet they could not establish themselves fully due to certain constraints on the socio-economic frontier. The aim of SBA is to draw in response from the minority business owners who are finding no way to boost their small business presence. The SBA therefore came up with the 8a certification program, which is undoubtedly the best thing to happen to the US minority owned businesses. If you belong to one of the minority communities in the USA, you stand a chance to grab this unique opportunity provided by the Small Business Administration (SBA) by earning the 8a certification for your enterprise.

Minority Business 8a Certification Program

To start with you have to apply to the SBA for obtaining the 8a certification. Before you start processing your 8a application you must take a break from all the activities and make sure that your personal and business status both stands eligible for obtaining the coveted 8a business certificate. To make things easy here are the prime eligibility criteria -

1. The applicant business firm must be ‘majority-owned’, that is the owner must have 51% or more of the ownership rights (in case there’s more than one owners)

2. All applicants must be American citizen either by birth or through naturalization.

3. The applicant business firm must be owned directly by individuals who belong to one or more of the minority communities of the United States of America. The term ‘minority’ is variously defined by the SBA, more prominently it indicates people who belong to one or more of the socially and economically segregated groups like the aboriginal American Indians, the Alaskan natives, the Hawaiian islanders as well as includes the black Americans and Hispanics naturalized American’s.

4. The applicant’s business must essentially be a ‘small’ business in every sense of the term.

5. The applicant small biz firm must display its promise and potential for future growth and success.

6. The small business must also have a considerably good track record in the same field in the last 2-3 years prior to applying for 8a certification.

Once your business meets all the of the above eligibility parameters, as decided by the SBA authority, you’re free to apply for the coveted SBA 8a Certification program and take your entrepreneurship initiative to the next levels of prosperity.

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What is takes to qualify for the 8A certification program

8a certification application

8A Certification Application

If you are thinking to apply for the 8A certification program, and not worried about your eligibility, then it is quite likely that your application for the federal certification may get rejected. Qualifying for 8A SBA program is one of the hardest steps for a potential applicant.

To qualify for the Benefits 8a certification program, you need to meet few requisites. In case you fail to meet any one the mandatory requisites, your firm will not get the official federal recognition. In order to derive the benefits of the 8A SBA program, your firm needs to meet the eligibility requirements, which includes:

Disadvantaged Business

If you intend to apply for the 8A programs, it is mandatory for your firm to be monitored by a disadvantaged individual. It is imperative that a disadvantaged person occupies the highest rank or position in your firm. The disadvantaged individual must be in-charge of the firm and should be responsible for the day-to-day activities of the business.

Good Track Record

Your firm must maintain an excellent record of accomplishment, by delivering every order on time and meeting all the customer requirements.  This will help the SBA to evaluate your company on a positive note and help you qualify for the government program. Few positive testimonials from your previous clients will add to your overall credentials.

Good Moral Character

This is one of the most important requirements set by the SBA. The person representing your company must have a decent moral character. Fiscal responsibility plays an important factor in moral accountability. Make sure that the representative you opt for your company is not on parole or a felon. Such people should not hold a significant position in the ownership or the management of the company. However, few other mars such as a DUI arrest for 10 years do not prohibit you from applying in the 8A certification program. Few other felony convictions such as tax scofflaws, unmet taxes, default on SBA loans, liens etc. are taken as serious crimes, committed by an applicant and hence will reject the application.

Small Business Concern

According to the standard set by the SBA, your business must be small and meet the requirements of the federal program. In case the SBA does not define your firm “small”, it is not possible for your company to get the certification.

Presence

A company applying for the 8A certification should remain active for not less than 9 years. It is imperative for your firm to remain active for nine whole years in order to qualify for the SBA program. The reason for such a requirement is that the SBA wants to determine whether your company is durable enough to bear the uncertain ups and downs in business and whether it has the potential for success.

To get the certification, your firm must meet all the eligibility factors set by the SBA. If the above points are not fulfilled, be rest assured that your application for the certification will get rejected. All the documents and paperwork must be in proper order before applying and must be in agreement with the federal and state law.

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What are the mandatory requirements of your business to become 8A certified?

If you have overlooked the importance of the compulsory requirements of your business to get 8A certification, getting your business certified by the SBA can become very difficult for you.

In order for your business to get 8A certification, it is mandatory that certain requirements are met as suggested by SBA. Fulfillment of specific details and requirements confirms that your firm is qualified to be 8A certified. Such requirements include:

8a certified

Business concern

This part generally involves the structure of the organization, articles of incorporation and special agreement bonds with the state government. This section also includes bank signature cards, insurance information and business background. The SBA confirms whether you actually control the organization or not and if your business have shared ownership, location or management. If in case any individual is having a higher position than you in your organization, it is quite likely that your business will not be 8A certified. The SBA also verifies your employment background and find out the possibility of any discrepancy. The sole purpose of the verification is to determine whether you have job outside the organization or not. The SBA also scrutinizes your personal financial statement and determines the net worth. Your net worth must value below USD 250000 excluding your house and business.

Financial Status

You business concern should be financially capable to be able to thrive in the program and must have positive equity. If your business has negative equity, it will not get 8 a certification. The SBA also evaluates whether your company can prosper without the continuous introduction of capital in the business. The cash flow of your company is also determined by the SBA to find out whether your organization will be able to cover the expense when any client fails to pay within time. Your business must provide at least 3 years of business tax returns for the analysis of the SBA to verify the sales report and authenticate the financial statements.

Personal Data

Your personal data which includes financial position, personal history and narratives play a significant role in the eligibility criteria of your 8A program. You do not require providing with a social disadvantage network in case you are a member of a designated group such as the Asian Pacific Americans, Black Americans, Hispanic American etc. Providing an economic disadvantage narrative is essential for each and every applicant, in order to determine whether a particular application is approved or not. The economic and social disadvantage narrative displays specific events from your life displaying the discrimination depending on the membership of the group applied for. Such narratives may include specific gender, handicap and specific race. The sole purpose of SBA is to offer credibility to your narrative by verifying as much detail as possible.

To get your business 8A certified, it is essential that you fulfill the above mentioned points carefully. After proper scrutiny of the above mentioned points, the SBA may grant the 8A certification to your business and offer an official recognition.

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Quick glance on 8A certification application process

For small business organizations, federal loans can be quite useful to develop the business. However, such loans are offered by the SBA only for business organizations which are owned and managed by minority, women or service disable veterans. The SBA 8A program is one of the largely available business agendas present in the market which focuses on developing the small organizations and promotes individual entrepreneurs. To avail such benefits of  SBA 8A, it is mandatory for you to successfully complete the application process. The 8A certification process as suggested by the SBA generally comprises of 3 basic parts including:

If you are an applicant, not less than 51% of the ownership of your business should be managed and controlled by a minority, women or service disable veterans. In addition to it, the owner of the majority of shares should have active involvement in the daily business operations. In this context, SBA utilizes a highly adept system that determines and finds out the individual majority shares owner of your business and makes sure that they adhere to the basic rules and regulations.

The second part is a very difficult step as it demands certain legal obligations to prove that you are economically and socially disadvantaged. According to the norms and standard set by the SBA, your business can qualify as economically and socially disadvantaged. If you are the majority share holder, make sure your net income should be more than USD 250000. This amount should exclude assets such as company ownership and personal home.

In the third step, the SBA will systematically check your business to determine whether it qualifies for small business requirements or not. If your business is on the list of banned businesses, then it will not pass the SBA 8a application process. The SBA accepts the standard for small business set by North American Industry Classification System which states that a business is small scaled if:

• It has around 500 employees form mining, manufacturing and other industrial procedures

• It has USD 7 million as an average annual receipt for a number of non-manufacturing businesses

• It has 100 employees for wholesale trade businesses

8A certification application process can turn out to be a complicated tricky task if not dealt with proficiency.  Getting your business organization 8A certified will not only add value to your company but will also help in bidding for federal contracts. Thus, 8A certification widens your prospects and offers you will a number of avenues to expand the growth of your business.

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