The Small Business Administration has a program that is designed to help minority-owned businesses. These are companies that are owned by people who belong to certain disadvantaged groups. Referred to as SBA 8a, the idea behind this program is to give a business owner certain benefits that will increase his or her sales and give them access to certain government contracts. However, before you apply, there are a few things you should know.
You must be economically and socially disadvantaged
The federal government has a clear definition of who is and who is not economically and socially disadvantaged. Those who are socially disadvantaged are members of ethnic groups that have been a target of prejudice and racism. This alone is not enough to qualify because you must also be economically disadvantaged. This aspect of the qualification is to help those who have limited access to capital and credit. But it is characterized by limits that are placed on your income and assets.
The SBA has a qualification tool online
Getting certified means filling out an application, and there is also the matter of documentation. This can take time, and you don't want to go through the trouble of doing all of this work if you don't think you will qualify. Unfortunately, the rules can be a bit confusing. For this reason, the SBA has created an online tool that is easy to use and will give you a general idea as to whether you will qualify for the program. It is called EZ8a, and it is the best place to start if you are interested in this program.
The process after you apply for the program
Once you have sent in your SBA 8a application, you will be notified by mail whether you have been approved. If you have been approved, you will then be considered a certified 8a company and will be listed in the SBA search engine as such. This will give the government and private sector companies the opportunity to purchase from you. You will now be eligible for certain contracts and may even be a sole source supplying your product. Although your participation in the program can last for several years, there is a limit, and your certification will expire.
How much your business will benefit from this program will depend upon the nature of your business. Certain products are more readily bought by government entities. But if you are a minority business owner, it is something that may benefit you. There is no cost associated with getting certified, but there may be an upside that will help your business grow.