If you would like a Hubzone Program eligibility analysis, please take our online hubzone eligibility questionnaire.
You are also welcome to review the basic eligibility requirements below.
Generally, to be approved into the Hubzone Program you must meet these basic eligibility requirements:
Eligibility Criteria 1:
Your business concern’s principal office must be located in a qualified SBA designated Hubzone. Search the SBA’s Mapping system and verify if your principal office is located in a qualified SBA designated Hubzone.
- Definition of Principal Office:
Principal office is defined as the location where the greatest number of the business concern’s employees at any one location perform their work. However, for those business concerns whose primary industry is service or construction, the determination of principal office excludes the business concern’s employees who perform the majority of their work at job-site locations to fulfill specific contract obligations.
If you help understanding this requirement please read our article on “Understanding the Hubzone 35% residency and principal office requirements“.
Eligibility Criteria 2:
Your business concern must be at least 51% unconditionally and directly owned and controlled by persons who are US citizens.
- Definition of unconditionally and directly owned and controlled:
Unconditionally and directly ownership means directly owning at least 51% of the business concern. Ownership must be direct and cannot be through another business or trust, unless the trust is revocable and you are the sole grantor and trustee of the trust. Control means both the day-to-day management and long term decision making authority for the business concern. Generally, you should be the highest ranking officer of the business too.
Eligibility Criteria 3:
35% of your business concern’s employees must reside in an SBA designated Hubzone.
- Definition of Employee and Reside:
Employee means all individuals employed on a full-time, part-time, or other basis, so long as that individual works a minimum of 40 hours per month. This includes employees obtained from a temporary employee agency, leasing concern, or through a union agreement or co-employed pursuant to a professional employer organization agreement. SBA will consider the totality of the circumstances, including criteria used by the IRS for Federal income tax purposes and those set forth in SBA’s Size Policy Statement No. 1, in determining whether individuals are employees of a concern. Volunteers (i.e., individuals who receive deferred compensation or no compensation, including no in-kind compensation, for work performed) are not considered employees. However, if an individual has an ownership interest in and works for the business a minimum of 40 hours per month, that owner is considered an employee regardless of whether or not the individual receives compensation. Reside means to live in a primary residence at a place for at least 180 days, or as a currently registered voter, and with the intent to live there indefinitely.
Again, if you help understanding this requirement please read our article on “Understanding the Hubzone 35% residency and principal office requirements“.
Eligibility Criteria 4:
Your business concern must be classified as a small business as defined by the SBA.
- Definition of Small Business:
Small business means the business concern, with its affiliates, must meet the size standard corresponding to its primary industry classification.
Eligibility Criteria 5:
Certify that when performing a Hubzone contract, at least 35% of your employees continue to reside in an SBA designated Hubzone. If your concern is owned by an Indian Tribal Government, 35% of your employees engaged in performing that contract must reside within an SBA designated Hubzone. You must “attempt” to maintain the 35% requirement throughout the life of the contract.
- Attempt to Maintain
This means that the business can fall below 35% without withdrawing, and losing its contract but must be making efforts to return to the 35% number, such as posting employment positions, etc. The SBA can de-certify a firm that does not makes efforts to regain its 35% Hubzone employee requirement.