8(a) Business Development Program: What Is It and How Does It Work?

The 8(a) Business Development Program is a government assistance initiative regulated by the U.S. Small Business Administration (SBA). It helps small businesses owned by socially and economically disadvantaged individuals secure government contracting opportunities.

Learn more about the 8(a) program, how it works, its advantages for aspiring business owners, and its application process.

What Is the 8(a) Business Development Program?

The 8(a) Business Development Program is a nine-year government program established for socially and economically disadvantaged small businesses. It aims to promote diversity in the business community and within the GovCon sector. 

The SBA identifies diverse groups qualified for 8(a) status, which includes:

• Black Americans
• Hispanic Americans
• Native Americans
• Asian Pacific Americans
• Subcontinent Asian Americans

Individuals outside the groups specified by the SBA can still participate in the 8(a) program as long as they provide solid proof of experiencing social and economic disadvantages. The disadvantages can stem from factors such as ethnic origin, race, and gender.

Additionally, the program allows entities owned by community development corporations, Alaska Native corporations, Native Hawaiian organizations, and Indian tribes to join the program.

Benefits of the 8(a) Business Development Program

The SBA, in collaboration with government agencies, guarantees equal access to federal contracts for 8(a) Business Development Program participants. Upon certification, businesses receive a suite of business development supports, including:

• Training
• Mentoring
• Technical guidance
• Financial assistance
• Management support
• Procurement assistance
• Federal contracting preferences

Moreover, qualified small businesses can take advantage of additional 8(a) program benefits, such as:

• Exclusive access to government contracts reserved for small businesses, particularly set-aside and sole-source contracts
• Get one-on-one support from Business Opportunity Specialists throughout the nine-year term of the program
• Get mentorship from large and established businesses through SBA’s Mentor-Protégé program
• The opportunity to team up with other businesses through joint ventures
• Qualify for priority access to federal surplus property
• Access to free training through SBA’s Empower to Grow Program 

Eligibility Requirements for the 8(a) Program

Below are the requirements that businesses must meet to qualify for the 8(a) Business Development Program.

• The firm must be categorized as a small business per the SBA size standards.
• At least 51% of the company must be managed by socially and economically disadvantaged people.
• The company must be operational for at least two years.
• The company must be new to the 8(a) program.

In addition to these general requirements, specific criteria apply to the business owner.

• The business owner must be socially and economically disadvantaged per Title 13 Part 124 of the Code of Federal Regulations.
• The business owner must be a U.S. citizen.
• The business owner must have a good character.
• The personal net worth of the business owner must not exceed $850,000.
• The business owner’s average adjusted gross income (AGI) must be $400,000 or less.
• The business owner’s total assets must not exceed $6.5 million..

How to Apply for the 8(a) Program

Businesses must be certified by the SBA to be eligible for the 8(a) Business Development Program. As part of the application process, business owners must:

• Conduct a preliminary assessment to determine the business’ eligibility for the program.
• Consult with a local SBA District Office to assess readiness and prepare for the application process.

Once ready, applicants can submit their application through the SBA’s online portal. 

8(a) Business Development Program Application Process

Below is a comprehensive overview of the application process.

1. Ensure the business’ eligibility to the criteria outlined by the SBA.

2. Gather the necessary documents. The SBA may require different documents based on the business structure (e.g., sole proprietorship, LLC, corporation).

Here are the general documents that must be submitted:

• Stock/Membership Certificates
• Certificate of Good Standing
• Business and Industry Licensing
• Business Federal Tax Returns
• Most recent financial statements
• Recent contracts
• Personal Federal Tax Returns 
• Evidence of your U.S. Citizenship
  

3. Identify the appropriate NAICS code for the business.

4. Visit the System for Award Management (SAM) to create a profile of your small business.

Before you can register, you must secure the following:

• Unique Entity ID 
• Taxpayer Identification Number (TIN)
• Employer Identification Number (EIN)
• Social Security number (SSN)
• Mobile Personal Identification Number (MPIN)
• Data Universal Numbering System (DUNS) number

Complete and submit the application online through the SBA’s website or in person at a local SBA district office. Once the SBA receives the application, the review process begins.

The agency then sends out formal notification through email or mailed letter informing the applicant whether the business has been accepted into the 8(a) program. This step typically takes up to 90 days.

5. If accepted, arrange a meeting with a local SBA representative to finalize the 8(a) certification. During this meeting, the SBA representative can assist in completing the 1010c form.

6. Maintain eligibility to continue benefiting from the program’s benefits. 

Certified businesses must undergo an annual review to ensure they are meeting the SBA’s statutory and regulatory requirements. 8(a) program participants are required to submit specific information to their servicing SBA District Office. 

Detailed instructions for maintaining 8(a) certification can be found in the SBA’s Annual Review Checklist.