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Aspiring 8a

Five Myths About the 8(a) Certification

There are a number of myths (misconceptions) concerning the SBA’s popular, yet surprisingly unknown, 8(a) Certification. While I field and answer these questions each and every week, there are five misunderstandings that come up time and time again.

 

1.) Your company cannot get 8(a) certified if it has not been in business for at least 2 years.

There is a waiver process for businesses looking to obtain their 8(a) certifications sooner than 2 years.  The typical requirements are that:

a.            The owner of the firm has significant industry experience.

b.            The business has one tax return with revenue and an income.

c.             The owner of the firm works full-time for the applicant concern.

d.            The firm has revenue from its inception greater than $150,000.

e.            The business and owner meet all other 8(a) requirements.

 

Note:  A 2-year waiver is not needed if the company is only changing the organizational structure of the business. For example:  Changing a sole-proprietorship to a corporation.

 

2.) Your company cannot get certified if your past application has been rejected by the SBA.

The SBA rejects 70% of all applications completed by non-professionals largely in part due to lack of completeness. A firm having its 8(a) application rejected on the first attempt is very common.

 

3.) The 8(a) Certification really can’t do that much for my business.

In 2018 8(a) certified companies received well over $40 Billion dollars which represents 7+ million dollars in annual revenue per 8(a) firm.

 

4.) My company should be a well-established mid-tier business before I apply for the 8(a) Certification.

The SBA gives 8(a) companies the ability to engage in Joint Venture Partnerships and Mentor Protégé Arrangements with larger governmental contractors. These relationships can greatly increase a firm’s growth rate by providing the 8(a) firm with expertise, bonding, insurance, financial capabilities, as well as other assistance.

 

5.) I must be a 100% member of a minority group in order to prove to the SBA I am socially disadvantaged.

An individual that can trace 25% of their blood-lineage to a presumed disadvantaged minority group is eligible for 8(a) given adequate supporting documentation showing the person holds themselves out to be part of that minority group.

 

If you have any questions on getting qualified for an 8(a) Certification, or about the business development opportunities that this and/or other federal certifications can provide your small business, I recommend contacting an industry expert such as ez8a. They can be reached at (859)442-3300, and do not charge for an initial consultation.

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