The 8(a) Program — named for Section 8(a) of the Small Business Act ” is a business development program created to help small disadvantaged businesses compete in the market place. It is also designed to assist such companies in gaining access to federal and private procurement markets.

The focus of the program is to provide business development support, such as mentoring, procurement assistance, business counseling, training, financial assistance, surety bonding and other management and technical assistance. The goal, however, is to prepare small disadvantaged firms for procurement and other business opportunities.

Contact the SBA district office serving your local area to begin the process toward participating in the 8(a) Program. Representatives of the Small Business Administration can answer most general questions over the telephone. Some SBA district offices offer 8(a) orientation workshops to provide additional information regarding the eligibility requirements and to review various SBA forms.

Understanding what is required to participate in the Program is relatively straightforward. Any entity that applies must be categorized as a small business that is owned and controlled by a member of an economically or socially disadvantaged group. The owners of the entity must have exemplary character and be able to demonstrate the potential for success. The owners must also be citizens of the United States.

The Small Business Administration defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. Standard North American Industry Classification System codes are used by the Federal Government to identify and classify specific categories of business activity that represent the primary line of business of a firm. SBA size standards are based on these NAICS codes.

Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control. In the absence of evidence to the contrary, individuals who are members of the specific designated groups are presumed to be socially disadvantaged.

Individuals that are not members of a designated group can claim social disadvantage on the basis of a “preponderance of evidence.” Generally, preponderance is evidence of quality and quantity which leads the decision maker to conclude, objectively, that the existence or truth of the fact(s) asserted is more probable than not. This evidence must include at least one objective distinguishing feature that has contributed to social disadvantage, such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged.

Lack of access to capital and credit opportunities is one of the key factors in gauging if one is economically disadvantaged. When coupled with social disadvantage it is a measure of how effectively one can compete in the free enterprise system.

Program certification usually requires that a business be in operation for at least two years. The latest two years tax returns demonstrating operating revenue are sufficient to fulfill this requirement.

The Program is divided into two stages. The first stage is the development stage which is usually four years in duration. It is designed to help Program participants overcome economic disadvantage by providing business development assistance. The second stage is the transitional stage which usually lasts five years. This stage is designed to help participants overcome the remaining elements of economic disadvantage and to prepare participants for leaving the 8(a) program.

Want to find out more about programs for expanding your business? Visit Michael Saunders’ Websites on Government Business Grants and Business Grants for Women.