There are 6,038 active SBA 8(a) Certified firms as of April 2019. Below is an info graphic showing the location by state and number of active SBA 8(a) Certified firms. The source of this information is the SBA Dynamic Small Business database.
There are 6,785 active SBA HUBZone Certified firms as of April 2019. Below is an info graphic showing the location by state and number of active SBA Hubzone Certified firms. The source of this information is the SBA Dynamic Small Business database.
1) Late or non-submission of 8(a) Annual Review documents.
The most common eligibility problem 8(a) firms encounter is either the late or non-submission of required 8(a) Annual Review documents. The SBA is required to review each 8(a) firm’s program eligibility every year on the firm’s certification anniversary date. Your local SBA office will send a request for the required Annual Review documents and information shortly before the end of your program year which contains the date that your submission is due back to your SBA Business Development Specialist (BDS). If it is not received by the due date, you will be sent a reminder and a second due date. If the information is not submitted by this second date, SBA’s rules & regulations require the SBA to start program termination proceedings against your firm. The termination process may result in the loss of your 8(a) certification. Once it is lost you cannot be certified in the 8(a) program again. Since annual reviews are done every year on your anniversary date, you should be prepared for it and comply on time.
Below are 3 VetBiz Certification issues that we see on a regular basis. If you can avoid these three issues, your VA VetBiz application will go through the verification process much faster and with a positive outcome.
1. Full-time Devotion to the Applicant Concern
The 51% Veteran or Service-Disabled Veteran owner(s) should devote full time to the applicant concern during normal operating hours of similar businesses. In addition, the veteran owners should not have any other outside employment that could take away from their day-to-day management of the applicant firm. Make sure resumes and LinkedIn profiles are up to date with current positions and previous employment has ended. Any Veterans with outside employment will face many questions from the CVE which will most likely end in denial.
The applicant(s) for 8(a) Certification must have an Adjusted Net Worth of less than $250,000 and total assets of less than $4,000,000 to be considered economically disadvantaged by the SBA.
What is the definition of Adjusted Net Worth?
Adjusted Net Worth = Personal Assets – Liabilities – [Equity in primary residence + ownership interest in business + IRA/Other Retirement Accounts subject to a penalty for early withdrawal].
Additionally, Total Assets = Personal Assets – IRA/Other Retirement Accounts subject to a penalty for early withdrawal.
The office of the Hubzone Program uses a three-level review process for all Hubzone applications and supporting documentation to ensure that it only admits eligible firms into the program. Each level of review evaluates whether a firm should be certified or declined entry into the Hubzone program. First level analysts review supporting documents including owners’ proof of citizenship, principal office leases, payroll, employees’ driver’s licenses, and utility bills. The Hubzone program director or deputy director makes the final determination to certify or decline the applicant firm. See below for a summary of the steps in the Hubzone certification process.
Your business must possess reasonable prospects for success in competing in the private sector if admitted to the 8(a) program.
To do so, it must be in business in its primary industry classification (NAICS code) for at least two full years (24 months) immediately prior to the date of its 8(a) application and be able to provide business tax returns for each of the two previous tax years that show sufficient operating revenues earned within the primary industry (NAICS code) in which the applicant is seeking 8(a) certification for.
Ok, so you are ready to take the leap into getting SBA 8(a) Certified. Where do you start?
Before you take the leap, you should be sure that you and your firm meet all the SBA 8(a) Program eligibility requirements. One of the most common mistakes is to automatically assume you qualify for the 8(a) Program because you are a minority owned business.
Pick up the phone. Speak to the actual person who will be preparing your application.
You should be able to call and speak directly to the individual who will be responsible for preparing your application. At Cloveer, you can call and speak to the employee who will be responsible for preparing your application. They will answer any of your questions and let you know whether or not you are eligible to become certified into one of these programs at no cost.