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SBA proposes new rules for 8(a) Economic Disadvantage requirements

The SBA is proposing new rules for individuals seeking 8(a) Certification regarding economic disadvantage.

The current rule requires the disadvantaged individual to meet the following economic disadvantage requirements:

  1. Have an Adjusted Net Worth of less than $250,000 to get 8(a) Certified. Have an Adjusted Net Worth of less than $750,000 once formally 8(a) Certified for continued 8(a) Program eligibility.
  2. Have an Adjusted Gross Income (AGI) of less than $250,000 over the three preceding years.
  3. Have a fair market value of less than $4,000,000 (including his or her primary residence and the value of the application business) in total assets. Less than $6,000,000 once formally 8(a) Certified for continued 8(a) Program eligibility.

The proposed rule would change the requirements to:

  1. Have an Adjusted Net Worth of less than $750,000 to get and remain 8(a) Certified.
  2. Have an Adjusted Gross Income (AGI) of less than $350,000 over the three preceding years to get and remain 8(a) Certified.
  3. Have a fair market value of less than $6,000,000 (including his or her primary residence and the value of the application business) in total assets to get and remain 8(a) Certified.

This is a proposed rule by the SBA and has not implemented these new requirements yet. The SBA is requesting comments on the proposed changes.

This is great news. The increase of Adjusted Net Worth, Adjusted Gross Income (AGI) and total assets may very well open up the 8(a) Program to individuals who currently do not meet the current requirements, if implemented.

Bookmark our blog for any updates. As soon as any proposed rule is made, we will post it on our site.

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