Last year, the SBA greatly reduced the waiting period for firms being denied access into the 8(a) BD Program from 1 year to 90 days. This change lessened the severity of an application error, thus allowing an otherwise eligible firm the ability to quickly reapply for the 8(a) Certification.
+Good News: Firms can reapply after 90 days.
xBad News: SBA appears to be more likely to deny an application now that the results are not as draconian for applicants.
Current Reality: If we look at the numbers, there are currently over 6,000 firms in the SBA’s 8(a) BD Program. This means that nearly 700 firms are approved each year. The SBA currently receives roughly 2,400 applications per year, or around a 27% approval rate. Firms hiring consultants generally have a much higher approval rate, and therefore small businesses attempting to complete the application on their own likely fair far worse than this approval rate.
8(a) Failure Trap: A normal failure trap that I have seen in clients that come to us after throwing in the towel is that they already have 250+ hours into their application. They have made 2-3 attempts to get the SBA to accept their application, during the SBA review for completeness stage. With each attempt, the applicant does receive an instructional letter, however, the 15-20 days it takes for the SBA to review and respond to the applicant generally times out the following documents:
-Business Financial Records which must be current within 90 days of the application.
-Personal Financial Data which must be current within 30 days of the application.
Failed Application Problems: If an applicant is denied, the SBA retains a copy of the denial letter. The letter is then used as a starting point for the next application.
Was the issue with the applicant and concern corrected to the satisfaction of the SBA? If so, how was it corrected? The SBA will no longer give the applicant the benefit of the doubt.
I therefore recommend applicants adhere to the following when dealing with the SBA:
This may all sound like a lot, however, I have seen many businesses make the transition from small to medium size through the use of their 8(a) Certification. So even though the application process can be daunting, when all is said and done, most participants report that the initial effort spent was well worth the end result.
If you would like assistance during any step of the 8(a) Certification process, I always recommend contacting an industry expert such as ez8a or Advance 8a. Neither charge for an initial consultation.
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