The SBA issued a proposed rule entitled “Reforms to Remove SBA’s 8(a) Program’s Rebuttable Presumption of Social Disadvantage for Individually Owned Firms Only; Reforms Do Not Impact Entity-Owned Firms,” a week ago (June 11, 2026). As not to create any unnecessary anxiety for everyone, this proposed rule does not impact current individually-owned participants in the U.S. Small Business Administration’s (SBA) 8(a) BD Program, or entity-owned firms in said program.

Beginning in January of this year, 8(a) application approval has slowed, while firms waited on more guidance that was said to be incoming as to how to handle the presumption of social disadvantage. While this guidance is here now, it is just proposed, thus there will continue to be application crawl, unfortunately.

The SBA will be judging your firm according to the following requirement for social disadvantage, according to this new proposed rule: (i) U.S. citizen (any citizen) show; (ii) during his or her lifetime; (iii) a governmental or private entity in the United States (such as a federal, state or local government, university or corporation); (iv) through an action, policy, rule, regulation of any of its agencies, subsidiaries or authorized agents; (v) discriminated or was biased against a racial, ethnic, or cultural group of which the U.S. citizen is a member of or favored a racial, ethnic, or cultural group of which the U.S. citizen is not a member of; and (vi) the U.S. citizen must establish that such discrimination or bias resulted in loss of access to capital or diminished economic advancement. No longer will it be enough to show that you were discriminated against, or not a member of a group that was, in fact, given preferential treatment, Providing excruciating detail of the negative financial impact that this had on you will be expected, including your own self-certification that you were a member of a particular group discriminated against at the time that this took place.

But it doesn’t end there, the SBA is proposing the requirement that “evidence” of the government’s, university’s, or corporation’s action, policy, rule, or regulation that disfavored the U.S. citizen’s group be provided, in detail of course. For this you could give what is treated now as unlawful DEI programs or policies, “unlawful” affirmative action programs or policies, race-based quotas, set-asides, or hiring targets, or anything of this nature that gave an advantage to any group over others (ie, yours) on the basis of race.

A U.S. citizen that can show all of this in addition to the other requirements of the 8(a) BD Program such as potential for success, economic disadvantage, good character, et al, will be in an optimal position to be certified 8(a).

Current 8(a) Participants and Entity-Owned Firms
There are exclusions to who will be affected by the proposed rule, namely that it “does not affect participants currently admitted to the 8(a) BD Program,” and that “SBA does not currently intend to apply the new test to current Participants at their next annual review,” as well as companies that are owned and controlled by entity-owned firms, such as tribes, Alaska Native Corporations, Native Hawaiian Organizations, or Community Development Corporations. The SBA is requesting feedback on the former. For further explanation from the government on the latter, click here.

And all of this comes almost three years after the decision in Ultima Servs. Corp. v. U.S. Dep’t of Agric., 683 F. Supp. 3d 745 (E.D. Tenn. 2023), which directed the SBA from applying the rebuttable presumption of social disadvantage in administering the 8(a) program. Since Ultima, SBA has not applied a rebuttable presumption of social disadvantage but has required all participants and applicants to demonstrate the social disadvantage that the qualifying owner(s) of the firms has endured due to an objective distinguishing feature (i.e., race, ethnic origin, gender, physical handicap) that has negatively impacted the individual’s entry into or advancement in the business world. The aforementioned proposed rule explains, this practice still “persisted until 2025 when certain related practices and policies were terminated.”

So Where Do You Go From Here?

This is a proposal, and comments have been solicited until July 13, 2026.If you have an 8(a) application in process, this proposed rule changing the requirements for social disadvantage will most likely have an impact on you. If you have questions, I always recommend contacting an industry expert such as ez8a. There guidance is money well spent, but they do not charge for an initial consultation.