8a certification – Timing Your Application

Small Business Administration (SBA) Certifications

Deciding when to go forward with you 8a application is often not an easy decision. Many successful companies put off the 8a certification until it is too late and lose the ability to become a Large Federal Prime Contractor Forever. 8a Juggling Act
In order for a firm to receive an 8a certification they must meet the SBA’s “likelihood of success” threshold. In order to get over this threshold the firm must have overcome one of the following two obstacles. Standard

1. The firm is deemed to be in business beginning with the date in which the business first has revenue/billing not the incorporation date or federal tax id number for the company. If the business changes legal entity type (i.e. sole proprietor to corporation) this does not reset the business start date
2. The firm is making some form of economic profit.
3. The firm has at least 3 clients, and not one of those clients represents more than 70% of total firm billing.
4. Ideally the candidate has over $100,000 in annual revenue

2-Year Waiver

1. Business has at least 1 tax return in which financials can be reconciled.
2. Business owner has a strong resume and track record in the firm’s industry.
3. The firm has completed at least one federal contract; it can be a very small contract.
4. The firm has at least 3 clients, and not one of those clients represents more than 70% of total firm billing.
5. Business is making an economic profit.
6. Annual revenue is over $100,000

Problems with waiting to long – A firm that is being successful the owner may quickly lose 8a eligibility due to losing his/her economic disadvantaged status. Once you are over these thresholds you can no-longer apply for an 8a certification. Personal net income must be less than $250,000 on average for the past three years. Personal net worth must be less than $250,000 excluding the value of the personal residence, retirement accounts, and the value of the business. Total value of all assets must be under $4,000,000. We can help you make the business decision if now is the right time to go forward with an 8a application