At the conclusion of 2020, there were over 10 million minority-owned small businesses operating in the United States. As minorities become the majority segment of the population, their presence in the business world will also increase. Research shows that even though minority growth is moving rapidly, the ratio of population to minority small business ownership remains imbalanced. This is true even as further research shows that the fastest-growing segment of small business owners are minorities. The SBA recognizes this and while the program does not have a funding option that specifically caters to minorities, there are resources available. The 8(a) Minority Business Development Program was created with the goal of helping minority-owned businesses compete and grow.
SBA 8(a) Certification Requirements
If you’re a minority-owned small business looking to gain a foothold in the federal space, the 8(a) program could be just the one you need. Government contracts are lucrative, long-term, and can have an incredible impact on all facets of your business. In order to apply for these opportunities, you must first obtain the 8(a) Certification by meeting the following qualifications.
- Qualify as a small business
- Have no previous participation in the 8(a) program
- You must have a personal net worth of $750,000 or less
- Adjusted gross income of $350,000 or less
- Assets totaling $6 million or less
- Been in business for at least two years and show the potential for future success
- Be able to prove you’re a business owner of good character
It’s a nine-year program and the certification must be renewed annually, showing proof that they meet the requirements of the program. The first four years in the program are considered developmental. The final five years are viewed as transitional as the business leverages the knowledge gained from years 1-4 to drive growth during years 5-9.
SBA 8(a) Program Benefits
By gaining the coveted 8(a) Certification, you’ve opened your business up to valuable growth opportunities. Other benefits include:
- Receive consultative services for nine years from professionals who understand how to cultivate and grow your business
- Be 51% owned and controlled by a socially or economically disadvantaged person
- Participate in the SBA Mentor-Protégé program and receive mentoring from seasoned leadership from firms who have success with federal agencies
- Have access to federal surplus property on a priority basis
- Position your firm to compete for lucrative set-aside contracts, designated for small businesses to help them compete for federal contracts
- Training is also a huge part of the 8(a) efforts and under it, business owners receive training through the SBA’s 7(j) Management and Technical Assistance program
The SBA 7(a) and SBA 8(a) Programs Can Be Used Together
The SBA does not have a program just for minorities, but the 8(a) option gives minority businesses that have historically been shut out, an opportunity to compete. Another point to consider is that participation in the 8(a) program, can open doors to receive funding through the 7(a) arm of the SBA. For example, if your business is able to secure federal contracts that increase revenues and profits, you as a business owner will be in a much stronger position to apply for funds through the SBA 7(a) side of the house.
Our Business Plan Writers Make Your Application More Attractive for Minority Business Loans
If you’re looking for help finding your way through the different levels of SBA options, the Coley Group can help. Our professionals can make sure you meet the requirements and put your business in a position to succeed. As part of these programs, you’re going to need a business plan and that’s something we specialize in.
Our staff is filled with competent, capable, MBA writers who understand how to create the type of narrative that gets your business noticed. We’d love to speak with you to see how we can best serve your needs. Please contact us today to receive a free quote on our services.