You have probably heard of the popular funding programs by the Small Business Administration (SBA) named SBA 503 and SBA 7(a) loans. However, there is another great program from the administration that is the SBA 8(a) Business Development program. Read on to find out what this program is and if it is something you should consider for your business.
What is the SBA 8(a) Development Program?
The SBA 8(a) development program is an assistance program for small disadvantaged businesses that are socially and economically disadvantaged. The program supports businesses in mentoring, business counseling, training, financial assistance, and other management and technical assistance.
The program is divided in two phases that is 9 years long including a four-year developmental stage and a five-year transition stage. To maintain a good standing in the program, businesses need to complete annual reviews.
Businesses cannot participate more than once and is only open to businesses and individuals who have not participated before. The business will not be eligible to participate in the program under those circumstances.
Benefits of the Development Program
Businesses can receive contracts with up to $4 million for goods and services and $6.5 million for manufacturing. 8(a) firms can form joint ventures and teams to bid on contracts. It makes you attractive to a larger federal government contractor
Business Owner Qualifications for the Program
To qualify for the SBA 8(a) development program, business owners need the following:
- Be US citizen who are socially and economically disadvantaged (African Americans, Hispanic Americans, Asian Pacific Americans, and Native Americans) and also have at least 51% control and ownership of the business.
- Have a net worth of $250,000 or below,
- Have assets that are worth $4 million or below.
- Be new to the program
- Manage day-to-day activities
- Make long-term decisions for the business
Small Business Qualifications for the Program
There are also small business qualifications for the program and must meet the following requirements:
- Qualify for a small business for government contracting purposes
- First time using the program
- Demonstrate good character
- Demonstrate the potential to succeed
Is the SBA 8(a) Program Right for You?
You need to make sure it is the right time to apply. You need to have the experience so that you capitalize on the opportunity. Assess the federal contract process and the goals of your business now and in the future before you apply. This way you can get the most out of the enrollment.