How to determine your Adjusted Net Worth

The applicant(s) for 8(a) Certification must have an Adjusted Net Worth of less than $850,000 and total assets of less than $6,500,000 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].

Additionally, Total Assets = Personal Assets – IRA/Other Retirement.

How do I determine if my Adjusted Net Worth meets the requirements for 8(a) Certification Purposes?

Cloveer has created an online Adjusted Net Worth calculator (See below) that will help determine if you meet the above requirements. Our calculator allows you to enter the current value of all assets and liabilities for the 8(a) Applicant.

Tip: Even though the SBA does not require you to initially submit statements backing up the values you reported to the SBA, we firmly suggest you keep a PDF copy of each supporting statement used to obtain the value for every asset and liability reported. Note. All values reported to the SBA must be no older than 30 days old.

Adjusted Net Worth Calculator

The Applicant(s) for 8(a) Certification should complete the calculator below using current values for all assets and liabilities from actual account statements that are no older than 30 days.

If you find that need additional time to complete the calculator you can click the “Save and Continue Later” link at the bottom to save and return at any time up to 30 days to complete your adjusted net worth.

FYI. Your Adjusted Net Worth and Total Assets will be automatically calculated at the bottom of this form.

Personal Assets of 8(a) or EDWOSB Applicant Only - The values should be taken from statements no older than 30 days old.
- Checking Accounts and Cash on Hand - Personal Accounts Only
  Enter the current value of all checking accounts and cash you have on hand. If you are married and the accounts are held in both names enter only 50% of the total account value(s).
- Savings Accounts - Personal Accounts Only
  Enter the current value of all savings accounts. If you are married and these accounts are held in both names enter only 50% of the total account value(s).
- Retirement Accounts
  Accounts such as a traditional IRA, Rollover IRA, SEP IRA, 401(k), Roth etc. Enter the current value of your retirement accounts Since these accounts are typically not in both names, do not split the value.
- Accounts and Notes Receivable
  Enter the current value of any loans that are owed to you personally or from your company (shareholder or member loans). These company loans should be reported on your current balance sheet for your business as a liability.
- Life Insurance - Cash Surrender Value Only
  Only enter the Cash Surrender Value of the Policy. Do not enter the face value. If the policy is a term policy and has no cash surrender value, enter $0
- Stocks, Bonds and Mutual Funds
  Enter the current value of all privately held stocks, bonds and mutual funds. If you are married and these accounts are held in both names enter only 50% of the account value(s).
- Ownership Interest in Business
  Enter your total equity in the applicant business. The easiest way to determine this value is by taking the total equity value from your current year to date balance sheet and dividing it by your percentage of ownership. Do not split this 50/50 if you are married.
- Primary Residence
  Enter the current market value of your Primary Residence. Tip: Visit Homesnap.com or Zillow.com to get a current market value). If you are married and the deed for this property is held in both names enter only 50% of the Asset value.
- Other Real Estate
  Enter the current market value of all other real estate (rentals, investment properties, timeshares, foreign properties, etc.). Tip: Visit Homesnap.com or Zillow.com to get a current market value). If you are married and the deed for this property is held in both names enter only 50% of the Asset value.
- Automobiles
  Enter the current market value of all automobiles owned. Tip: Visit Kelly Blue Book to get a current value. If the vehicle is leased enter $0 since it is not owned. If you are married and any of these vehicles are titled in both names enter only 50% of the Asset value.
- Other Personal Property
  Enter the approximate value of your Personal Property (e.g. furniture, clothing, jewelry, electronics, artwork, tools, etc.) Do not over estimate here. Remember to split the total amount 50/50, if married. Please note you MUST list a value for this item.
- Other Assets
  Enter the current market value of any Boats, Motorcycles, Recreation Vehicles, 529 or College Savings Accounts, or Ownership Interest in any other Business) Tip: Visit Nada.com to get current market value for boats, motorcycles, etc. If you are married and any of these other assets are held in both names enter only 50% of the asset value.
- Personal Liabilities of Applicant Only
- Home Equity Line of Credit/Loan - Primary Residence
  Enter the total balance for any home equity loans or lines of credit secured by your primary residence. If you are married and the loans or lines of credit are in both names enter only 50% of the total balance owed.
- Notes Payable to Bank/Others
  Enter the total balance for other loans (e.g., shareholder/member loans, student loans, home equity loans not secured by primary residence or lines of credit not secured by your primary residence.) Company loans you owe should be reported on your current balance sheet for your business as an asset. If you are married and the loans or lines of credit are in both names enter only 50% of the total balance owed.
- Installment Accounts (Other)
  Enter the total balance for all personal Credit Cards. If you are married and the credit card is in both names enter only 50% of the total balance owed.
- Installment Accounts (Auto)
  Enter the total balance for all Auto Loans including leases. If you are married and the auto loan or lease is in both names enter only 50% of the total balance owed.
- Loan on Life Insurance
  If you have borrowed from your Life Insurance, enter the current balance owed.
- Mortgage - Primary Residence
  Enter the current balance for the first mortgage on your primary residence. If you are married and the mortgage is in both names enter only 50% of the total balance owed.
- Mortgages - Other Real Estate
  Enter the current balance for the mortgage on all other real estate (rentals, investment properties, timeshares, foreign properties, etc.). If you are married and the mortgage is in both names enter only 50% of the total balance owed.
- Unpaid Taxes
  Only enter the current balance for any past due taxes owed to the IRS, State or other entities. If you are married and the taxes that are owed are in both names enter only 50% of the total balance owed.
- Other Liabilities
  Enter the total balance for other liabilities (Motorcycles, Recreation Vehicles, Boats etc.). If you are married and the loans are in both names enter only 50% of the total balance owed.
Your SBA Adjusted Net Worth and Total Assets Calculation
- Your Total Assets
  Note: If your total SBA counted Assets are below $6,500,000 you are considered Economically Disadvantaged by the SBA for 8(a) or EDWOSB Certification Purposes.
- Hidden
  Total Assets - SBA Calc
  Note: If your total SBA counted Assets are below $6,500,000 you are considered Economically Disadvantaged by the SBA for 8(a) or EDWOSB Certification Purposes.
- Your Adjusted Net Worth Value
  Note: If your Adjusted Net Worth is below $850,000 you are considered Economically Disadvantaged by the SBA for 8(a) or EDWOSB Certification Purposes.
- Hidden
  Total Liabilities SBA Calc
*Important* If you have transferred and any assets within two years of the time you apply for 8(a) or EDWOSB Certification for less than fair market value the full amount of the asset, at the time of the transfer will re attributed back to the individual towards their Adjusted Net Worth. However, the SBA will not attribute to an individual claiming disadvantaged status any assets transferred by that individual to an immediate family member that are consistent with the customary recognition of special occasions, such as birthdays, graduations, anniversaries, and retirements.

The SBA will also consider a spouse’s financial situation in determining an individual’s access to credit and capital where the spouse has a role in the business (e.g., an officer, employee or director) or has lent money to, provided credit support to, or guaranteed a loan of the business. This means that each would need to have an Adjusted Net Worth of less than $850,000 to qualify for the 8(a) or EDWOSB Program.

Save and Continue Later

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Personal Assets of 8(a) or EDWOSB Applicant Only - The values should be taken from statements no older than 30 days old.

Personal Liabilities of Applicant Only

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Rick Otero