Managing Business Expectations

Posted on: 12 August 2020

If you're seeking SBA 8a application assistance, it's wise to have as many of the basic items on the checklist figured out before you start the process. Here are three ways you can streamline things a bit when you go for SBA 8a help.

Demonstrating Disadvantage

The goal of the 8a system is to provide opportunities to businesses that are owned primarily by people from socially and economically disadvantaged groups. Federal code includes a list of groups that are presumed to suffer social disadvantages. Many of these groups are defined by racial and ethnic traits.

If you don't qualify under the presumptive definition, you might still qualify by demonstrating your membership in a group that suffers discrimination and exists outside the mainstream of American society. Discrimination based on gender and physical handicaps, for example, may be considered sufficient for qualification.

You'll also have to prove your economic circumstances create problems in getting a business to the next stage of growth. The definition of economic disadvantage is available here, but a starting point is that you must not have a net worth over $250,000. Be prepared to document your finances and the current state of your business. Also, you'll need the governing documents for your enterprise.

Ownership Requirements

Another thing an SBA 8a application consultant will want to see is documentation of the ownership structure of the business. The majority of the company's owners must be from disadvantaged groups. Also, the company can't own a stake large than 10% in another business that's owned by a majority of disadvantaged people.

Generally, a business must have been in operation for at least two years before the date listed in the 8a application. It may be possible to apply for a waiver, but preference is given to firms that are established within their industries.

Character

The SBA reserves the right to reject an application backed on a lack of character. This typically involves criminal conduct, professional disbarment, license suspensions, or business code violations. Such issues may involve the principals at the business or the enterprise itself. Even civil judgments and out-of-court settlements might be used as proof of character defects.

Requesting SBA 8a application help will, however, encourage you to consider applying if any of these issues exist. Try to be as forthcoming as possible about the nature of the offenses and what has been done to address them. If your application is rejected, you do have the right to petition for a hearing.