8(a) Burden of Proof
With the Rule Changes published effective on March 14, 2011 the Burden of Proof was placed upon the applicant for incomplete or inaccurate information. If information is not present that is required the information is “presumed to be adverse to the application.”
Therefore it is critical that the applicant conduct a thorough search them to make sure that they have not unintentionally omitted any information. Below is a list of seven of the most common areas that the SBA will search. At a minimum these information sources should be reviewed to determine if any could create a problem area for the applicant.
- Credit Report – The SBA will pull a credit report on the applicant. They are searching for the following information:
- Hidden assets not disclosed by the applicant.
- SBA or government loans that were defaulted on.
- Additional business ventures not reported.
- Tax Return Verification – The SBA can verify that the tax return submitted are accurate and are the correct version
- Company Website – The SBA may review your company website to see if any of the information on the website contradicts information in the firm’s application.
- Background Check – The SBA will most likely perform a background check on the 8(a) applicant and any undisclosed offenses, even if they would not otherwise hamper the application would result in an application denial.
- Calling References – The SBA may call references for the intention of determining if the person holds them out as a member of a certain ethnic group or to see if the applicant represents themselves as the person holding the highest position within the applicant firm. The person who is applying for 8(a) must hold the highest position within the firm.
- Corporate Headquarters Verification – The SBA will make sure the applicant spends at least part of each month at the corporate headquarters for the firm. If through investigation it is found contrary to the case the SBA can deny the application.
- Any other readily available information source about the applicant must be presumed to be checked by the SBA. This would include google, yahoo, bing as well as other readily available search engines.