Important Fact about 8(a) Adjusted Net Worth Requirements

As you may be aware, the applicant for 8(a) Certification must have an adjusted net worth of less than $250,000 to get 8(a) Certified. However, here is an important fact that you must also consider.

If the applicant is married, the SBA will consider the spouse’s financial situation also in determining whether the applicant’s access to capital and credit is diminished where the spouse has a role in the business (e.g. an officer, employee or director) or has lent money to, provided credit support to, or guaranteed a loan to the business. See CFR part 13: §124.104   Who is economically disadvantaged? for complete rules on 8(a) Economic Disadvantage requirements.

What is the definition of Adjusted Net Worth?

The algorithm used to determine Adjusted Net Worth for 8a Certification purposes is:

Adjusted Net Worth = Personal Assets – Personal Liabilities – [Equity in primary residence + value of ownership interest in applicant business + value of any IRA/401(k) or other retirement account that is subject to a penalty for early withdrawal]

If the applicant is married and the asset or liability is jointly held, you split the value 50/50. If the applicant is married and lives in a community property state, you only split assets and liabilities 50/50 if you have a transmutation or pre/post nuptial agreement that states otherwise.

How can I determine my Adjusted Worth?

You can easily determine your Adjusted Net Worth by using our Adjusted Net Worth Calculator.

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What is required to be submitted within the 8a Application to prove the applicant’s Adjusted Net Worth?

Each applicant, and their spouse, must submit a separate SBA Form 413, Personal Financial Statement. Along with the SBA Form 413 you must also submit statements for each asset or liability supporting the amounts reported. These statements cannot be any older than 30 days at the time of 8a Application submission.

Are there any ways to reduce an applicant’s Adjusted Net Worth below the $250,000 threshold?

For more information, contact us.

*Important* You cannot transfer an asset out of the applicant’s name within two years of the time your apply for 8a Certification for less than fair market value. Doing so will result in the full amount of the asset being re attributed back to the applicant.

Active SBA 8(a) Certified Firms as of July 1, 2014 by Location

There are 7,078 active SBA 8(a) Certified firms as of July 1, 2014. Below is an info graphic showing the location by state and number of active SBA 8(a) Certified firms. The source of this information is the SBA Dynamic Small Business database.

8(a) Certified Firms as of July 1, 2014

8(a) Certified Firms as of July 1, 2014

The top five states with 8(a) Certified Firms are:
1. Virginia – 880
2. California – 789
3. Maryland – 668
4. Texas – 605
5. Florida – 441

The top five states or US territories with the lowest number of 8(a) Certified firms are:
1. Vermont – 2
2. U.S. Virgin Islands – 3
3. Rhode Island – 7
4. Delaware – 9
5. North Dakota  – 10

This information is provided by Cloveer.com.

Cloveer provides products and services on the SBA 8(a), HUBZone, 8(m) and VA VetBiz programs.

Have additional Questions? or want to get started on your SBA 8(a) Application?

With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Accelerator

  • This interactive, web-based program is designed to guide you through the SBA 8(a) application process with ease.  The program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8(a) application. Moreover, it shows you how to organize your 8(a) application in the preferred SBA format.  As the nation’s #1 selling 8(a) application completion tool, we guarantee that no other program makes the process faster.

Option 28(a) Application Review

  • For those who wish to complete the application on their own, either using the 8(a) Application Accelerator or by other means, we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 38a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

8(a) Program. Ownership vs. Control

Control is not the same as ownership. For example a disadvantaged individual may own 51% of the business that is applying for 8(a) Certification but they may be found to not unconditionally control the company by the SBA.

As defined by the SBA in CFR 124.106, the SBA regards control as including both the strategic policy setting exercised by boards of directors and the day-to-day management and administration of business operations of the business.

In order to be found to control the business, here are the following requirements.

1. The disadvantaged individual must manage the daily business operations (Except for concerns owned by Indian tribes, ANC’s, NHO’s or CDC’s)

2. The disadvantaged individual must have managerial experience of the extent and complexity to run the business.

3. The disadvantaged individual need not have the technical expertise or possess the required license to be found to control the business if he or she can demonstrate that he or she has ultimate managerial control over those who possess the required license or technical expertise. However – where a critical license is held by a non-disadvantaged individual have an equity interest in the business, the non-disadvantaged individual may be found to control the business.

4. The disadvantaged individual must work full-time in the business, without any outside employment. In addition, the disadvantaged individual must devote full-time during the the normal working hours of the business. If the disadvantaged individual works in a wholly owned subsidiary of the business this full-time devotion may be considered to meet the requirement of full-time devotion.

5. The disadvantaged individual must hold the highest officer position in the business. (Usually President or CEO)

6. The disadvantaged individual must be physically located in the USA.

7. If the business is a partnership, the disadvantaged individual must serve as the the general partner with control over all partnership decisions.

8. If the business is a limited liability company, the disadvantaged individual must serve as management members with control over all decisions of the LLC.

9. If the business is a corporation, the disadvantaged individual must control the Board of Directors. See CFR 124.106 for Board of Director Control requirements.

10. No non-disadvantaged individual or immediate family member may be a former employer or principal of any disadvantaged individual, unless the relationship between the former employer or principal and the disadvantaged individual does not give the former employer actual control or the potential to control the business and such relationship is in the best interest of the business.

11. The disadvantaged individual must be the highest compensated individual.

12. Non-disadvantaged individuals who transfer the majority ownership or control of the firm to an immediate family member, within two years prior to the 8(a) Application and remain involved in the firm are presumed to control the firm.

13. The disadvantaged individual must be a guarantor of any critical financing or bond, if required.

14. Business relationships that exist with non-disadvantaged individuals or entities which cause economic dependence will cause a control issue.

Have additional Questions? or want to get started on your SBA 8(a) Application?

With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Accelerator

  • This interactive, web-based program is designed to guide you through the SBA 8(a) application process with ease.  The program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8(a) application. Moreover, it shows you how to organize your 8(a) application in the preferred SBA format.  As the nation’s #1 selling 8(a) application completion tool, we guarantee that no other program makes the process faster.

Option 28(a) Application Review

  • For those who wish to complete the application on their own, either using the 8(a) Application Accelerator or by other means, we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 38a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

 

 

Do you meet the 70% Economic Dependency Rule?

Economic Dependence is a significant obstacle to the eligibility of many applicants desiring to gain 8(a) Certification for their firms. In fact, it is currently the issue for which we have to turn the greatest number of potential applicants away, until the issue is resolved.

Here is a simple flow chart that will help you determine if economic dependency applies to your business. Click on the chart below to see a larger image.

Economic Dependency Chart

Economic Dependency Chart

Need assistance with your 8(a) Application? With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Accelerator

  • This interactive, web-based program is designed to guide you through the SBA 8(a) application process with ease.  The program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8(a) application. Moreover, it shows you how to organize your 8(a) application in the preferred SBA format.  As the nation’s #1 selling 8(a) application completion tool, we guarantee that no other program makes the process faster.

Option 28(a) Application Review

  • For those who wish to complete the application on their own, either using the 8(a) Application Accelerator or by other means, we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 38a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

List of Items needed to complete the SBA Form 413 (Personal Financial Statement)

The following is a detailed list of items needed to complete the SBA Form 413 (Personal Financial Statement.

Please note, this list may or may not cover every personal asset or liability you may have and should serve as only a general list.

All statements mentioned below must be no older than 30 days old when submitted to the SBA, contain all pages of the statement, list all of the account holder(s) names, account numbers, type(s) of account and account balances.

Assets:
1. Checking account statement.
2. Savings account statement.
3. IRA and any other retirement account statements along with a complete copy of the written terms and conditions for each retirement account held.
4. Copies of any shareholder/member promissory notes or personal loans owed to you.
5. Life insurance statement for any life insurance account that has a cash surrender value only, showing the cash surrender value, the face amount of the policy, name of insurance company and any beneficiaries.
6. Stocks, mutual funds and savings bonds statements. You will need to identify the number of shares owned, name of security, cost, market value quotation/exchange and date of statement.
7. Current balance sheet and income statement for the applicant business.
8. Type of real estate/property owned (e.g., primary residence, investment, vacation property, etc) along with address, date purchased, original cost, present market value (see #10), full name and address of mortgage holder, mortgage account number, mortgage balance (see #5 under liabilities), amount of payment and status of mortgage (e.g. current, delinquent, etc.)
9. Deed for each property owned.
10. Fair market valuation for each property owned.
11. Homeowners insurance policy for each property owned.
12. KBB value for each automobile owned
13. Title or registration for each automobile owned
14. A estimate of the value of your “Other Personal Property” along with a detailed listings of the contents.
15. Other Assets (Examples below):
– Other businesses owned (Current balance sheet and income statement)
– Boats (NADA value)
– Motorcycles (NADA value)

Liabilities:
1. Notes payable to banks such as HELOC, 2nd mortgage, Student loans, personal loans, shareholder/member loans, etc. (Full copy of original loan agreement along with a current statement). Additionally, you will need to identify the original balance for each note, the current balance, payment amount, frequency, how secured and whom the note is with.
2. Automobile loan statement(s)
3. Credit card statement(s). Include even if $0 balance, when submitted.
4. Statement of loan balance for any loan taken on life insurance.
5. Mortgage statement for each property owned.
6. If past taxes are owed, a current balance statement showing balance owed. Additionally, you will need to identify the type of taxes owed, to whom payable, when due and amount.
7. Any other liabilities such as boat, motorcycle, loan statement(s), etc.

Source of Income:
1. An amount for your current annual salary
2. An amount for any Net Investment income you may earn in the current year.
3. An amount for any real estate income you may earn on properties you own.
4. An amount for any any other income such as VA disability income, distributions, dividends or bonuses, etc.

Need assistance with your 8(a) Application? With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Accelerator

  • This interactive, web-based program is designed to guide you through the SBA 8(a) application process with ease.  The program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8(a) application. Moreover, it shows you how to organize your 8(a) application in the preferred SBA format.  As the nation’s #1 selling 8(a) application completion tool, we guarantee that no other program makes the process faster.

Option 28(a) Application Review

  • For those who wish to complete the application on their own, either using the 8(a) Application Accelerator or by other means, we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 38a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

 

10 Resume Tips for SBA 8(a) Applicants

Every individual claiming disadvantage status, as well as each officer, director, partner, member, key employee or holder of 10% or more ownership interest in the firm applying for the 8(a) Program must submit a detailed personal resume.

Here are 10 important tips to make sure these individual’s resume contain all information required by the SBA.

1. Make sure that all employment information on the resume matches any W-2 Forms submitted with your 8(a) Application.

2. Explain any gaps in employment. If previously unemployed, state that for the gap of employment on the resume. All gaps of employment, regardless, must be explained.

3. Ensure the resume clearly outlines the respective title of the individual and corresponds with all other pertinent information contained with the 8(a) Application. Examples (all 8(a) electronic application forms, organizational chart, contracts, taxes, etc.)

4. Fully explain all current and past employment management duties and responsibilities. Not just technical duties. and responsibilities.

5. Provide a listing of all formal and informal education, courses and professional licenses or certifications. Including any major study areas in which may be applicable to your primary industry you are seeking 8(a) Certification for

6. Note any past ownership in any other business. This includes ownership in a business for holding real estate.

7. Ensure that resume for the individual claiming disadvantage status is the highest ranking officer and notes that they run the day to day operations of the business.

8. Ensure that the resume for anyone other the individual claiming disadvantage status does not indicate that they can cause negative control with the applicant firm.

9. If anyone received a W-2 from any source, other than the applicant firm, in the most recent tax year, provide a letter from each employer indicating their final date of employment to prove full time devotion.

10. Check the resumes one last time before submitting to make sure items 1-9 above have been completed.

Need assistance with your 8(a) Application? With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Accelerator

  • This interactive, web-based program is designed to guide you through the SBA 8(a) application process with ease.  The program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8(a) application. Moreover, it shows you how to organize your 8(a) application in the preferred SBA format.  As the nation’s #1 selling 8(a) application completion tool, we guarantee that no other program makes the process faster.

Option 28(a) Application Review

  • For those who wish to complete the application on their own, either using the 8(a) Application Accelerator or by other means, we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 38a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

How to understand and interpret the HUBZone Application Submission Timeline

Below is the typical HUBZone Application timeline including how to interpret any messages you receive from the SBA after submitting your HUBZone Application.

Step Message From SBA Details Length of Time
Application Submitted Your Application has been submitted, but not authorized for processing. You should receive and email Nominal. As long as it takes for you to check your email and authorize the application.
Received You authorized your HUBZone Application, but is not complete until SBA requests and receives all supporting documents. Do not send any supporting documents prior to the SBA’s formal request. After you receive the SBA’s formal request, you have 10 business days to submit all of the requested documents. If you need an extension, you can email hubzonedocuments@sba.gov. Once the SBA receives your supporting documents, your HUBZone case will be assigned to a SBA reviewer. SBA may decline your application if any of the supporting documents are not received on or before the submission date. The day that you authorized the HUBZone application is your electronic verification date. This is the date that all of your supporting documents must cover. Typically 7-14 days.
On Hold Documents Your application is on hold awaiting additional information or documentation. After you submit the supporting documents, your application status may still show this message until your application is assigned to a SBA reviewer Typically 1-4 weeks.
First Level Review Your application has been assigned to an SBA analyst and is under first level review. Your first level reviewer may or may not request additional documentation from you. If additional documentation is required, your status may reverse back to On Hold Documents Typically 3-5 weeks.
Second Level Review Your application is under second level review. The first level review is complete and is being reviewed by a second set of eyes. Typically 1-3 weeks.
Final Review Your application is under final review. Final review will end with a final agency decision Typically 2-4 weeks.
Final Determination
(One or the other will occur)
Your application has been declined. You can view the details in your online correspondence history. If your firm is declined, you may reapply after 90 days. There is no reconsideration of HUBZone Applications. The decision to approve or decline is the final agency decision Complete – Determination rendered
Your application has been approved. You can view the details in your online correspondence history. Congratulations.

Special Statuses not listed above

Step Message From SBA Details Length of Time
Size Review Your application was forwarded to SBA’s Area Size Office for additional review. Some HUBZone Applications require a review by a SBA size specialist. Additional information may be requested by the SBA size Specialist. Varies
Legal Review Your application was forwarded to SBA’s Office of General Counsel for a legal review. Some HUBZone Application require a review by an SBA attorney. Additional information may be requested by the SBA. Varies
Withdrawn Your application has been withdrawn. You may reapply at any time. Complete
No Authorization Received – Withdrawn Your application was automatically withdrawn because no one from your firm authorized it for processing. You failed to follow the Received Step above. Complete
System Rejected Your application was rejected because according to your responses in the online application, your firm does not meet the HUBZone Eligibility requirements. Check your responses within your online application Complete

Need assistance with your HUBZone Application?

Why should you choose Cloveer Inc. to prepare your HUBZone Application?

1. We live and breath HUBZone Certification!

  • We keep up to date on all of the latest daily SBA HUBZone Program changes.
  • We have a detailed understanding of the current SBA HUBZone Regulations.

2. We have a very strong success rate!

  • We maintain a success rate of over 99% for clients we pre-qualify.
  • We have assisted hundreds of small businesses to achieve and maintain their HUBZone Program Certification.
  • We have real references to back up our success rate, that you can contact.

3. We have 14+ years of experience within the HUBZone Program!

  • All services performed are by Cloveer employees, not outside contractors, like some of our competitors.
  • Our principals (Rick and Monica Otero) worked in their family’s 8(a) Certified business. It was one of the country’s most successful 8(a), high-tech, information technology and electronics concerns. It was recognized for five consecutive years as one of the fastest growing companies in the nation, by Inc. Magazine

4. We won’t waste your time!

  • We pre-qualify all potential clients for our full HUBZone Application Service. We are not interested in wasting your time or ours if you do not qualify.
  • When you as a question, you will get a straight answer with no double talk.
  • Even if you don’t qualify currently we will identify the workaround to your specific issue(s) so you can apply down the road.

5. We believe in Customer Service!

  • We believe in treating every client with respect they deserve as a small business.
  • Our service agreements guarantee protection of their confidential information.
  • All information provided to us is protected on our secure services and will never be shared with anyone.

Finally. We are the best HUBZone Program consultant that is available on the market. The others just try to emulate us.

Visit the Cloveer HUBZone Website or call us at 813-333-5800 for more information.