The SBA recently changed the waiting period to re-apply for firms being denied an 8(a) Certification from one-year to 90 days. This change has likely been brought about to lower the discouragement in failed applicants, ultimately increasing the number of firms admitted into the 8(a) BD Program because they choose to stick with the process.
If we look at the numbers, there are currently around 5,800 firms that are 8(a) certified. This means that roughly 645 firms are approved each year. The SBA currently receives approximately 2,400 applications per year, or a 27% approval rate. Firms hiring consultants have a much higher certification rate, therefore firms attempting to complete the application on their own fair far worse than this approval rate.
The following is a normal failure pattern I have seen in clients that come to me after throwing in the towel on doing it themselves. Generally, the client has 250 hours into the process and made 2-3 attempts to get the SBA to accept their application, during the SBA review for completeness phase alone. 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 must be current within 90 days of the application.
- Personal financial data must be current within 30 days of the application.
Problem with a Failed Application
If an applicant is denied, the SBA retains a copy of the denial letter. This 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, as the SBA will no longer give the applicant the benefit of the doubt.
We therefore recommend applicants adhere to the following when dealing with the SBA.
1. Review every document in your application before uploading them. Once the application is submitted, if you go back and delete documents later, the SBA will review the deleted documents.
2. Disclose and explain any problems to the SBA, such as any past arrest, or agreements between parties.
3. Let the cards fall where they may when it comes to the balance between Economic Disadvantage and Potential to Complete Federal Contracts. Explaining to the SBA that you are broke may give them pause that you may not have the financial capacity to complete an awarded federal contract.
4. Do not tout the experience of others in the organization. The owner applicant must be the rock that you build the foundation of your application upon.
This may sound overwhelming, however, I have seen many businesses make the transition from small to medium size through the use of the 8(a) BD Program. So, even though the application process can be daunting, in the end most participants report that the initial effort spent was well worth the end result.
If you are wondering how the 8(a) Certification could be an advantage specifically to help you expand your business through federal contracting, I always recommend contacting an industry expert such as ez8a or Advance 8a. They have expertise in evaluating your firm's potential and do not charge for an initial consultation.