Do you qualify for the SBA 8(a) Program?

There are many eligibility criteria that a small business must meet to qualify for the SBA 8(a) Program. We have developed a free online 8(a) eligibility questionnaire that anyone can use to see if their business meets the 8(a) eligibility criteria.

http://www.cloveer.com/8aquestionnaire.html Screenshot

Cloveer.com 8a Program Eligibility Questionnaire

This free online 8(a) Certification Eligibility Questionnaire should generally be completed by the individual who primary 8(a) Program Eligibility will be based upon.

The questionnaire will take approximately 10-15 minutes to complete and as you answer most of the questions, it will automatically inform you if you have a potential eligibility issue.

If you find that you do qualify, we have three 8(a) Application Completion options:

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.

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 to discover what Cloveer can do for you.

Top 5 States with HUBZone Certified Firms

There are 6,032 active SBA HUBZone Certified firms as of April 2014. Below is an info graphic showing the location by state and number of active SBA HUBZone Certified firms. The source of this information is the SBA Dynamic Small Business database.

HUBZone infographic

HUBZone Certified Firms by Location as of April 2014

The top five states with HUBZone Certified Firms are:
1. California – 540
2. Oklahoma – 361
3. Virginia – 310
4. Texas – 279
5. Florida – 243

The top five states with the lowest number of HUBZone Certified firms are:
1. Delaware – 5
2. Rhode Island – 7
3. Vermont – 13
4. Maine – 18
5. Connecticut – 20

This information is provided by Cloveer.com.

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

 

Top Five States with SBA 8(a) Certified Firms

There are 7,300 active SBA 8(a) Certified firms as of April 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 Location infographic

8(a) Certified Firms by Location as of April 2014

The top five states with 8(a) Certified Firms are:
1. Virginia – 901
2. California – 805
3. Maryland – 697
4. Texas – 638
5. Florida – 454

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 – 6
4. Delaware – 9
5. Maine and  North Dakota (tie) – 11

This information is provided by Cloveer.com.

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

 

8a Program Eligibility – The $250,000 Adjusted Net Worth Requirement

Among the many 8a business development program eligibility requirements, the applicant for 8a Certification must have a personal adjusted net worth of less than $250,000 at the time of 8a Application Submission.

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.

The Unknown 70% Client Threshold for 8a Certification

Economic Dependence/The 70% Rule- as it applies to 8(a) Program Eligibility 

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.

First, a little history on the Economic Dependence issue, or the 70% rule as we often refer to it.  Per the Faison Office Products Office of Hearings and Appeals case in 2007, an applicant can be found to be dependent upon a single non-government entity if that entity constitutes 70% or more of the total revenues.

Businesses frequently start with a single client.  The application of this rule, and the timeframe for calculating this percentage, makes this an issue that must be examined closely.

In the past, such figures have been calculated by the SBA Area Size Manager over the previous fiscal year, or over the last 12 months.  The Size Manager will review the last three years of revenues, and thus revenue history even out beyond the last 12 months may be a factor in the final determination.  However, the 2013 OBTek OHA case found that the SBA could not reach into the past to determine this economic dependence, if the applicant “can prove, by clear and convincing evidence, that its interests are separate from those of the other concern”.  The applicant met that burden.  In this case the court found against economic dependence due to the fact that  the applicant’s revenues from a single entity had diversified to below 70% (only 18%), over a period of one month, which was the month immediately prior to certification.

This case continues to change the understanding of this issue, and its impact on 8(a) eligibility.  For some potential applicants, this means that this issue may be overcome in a relatively short time period, depending upon the circumstances.  This case implies that the month immediately prior to application must demonstrate that there is not a 70% issue based on the revenues deposited in the company bank account.  This should also be true during the month that a firm applies, and be able to be sustained for the duration of the application processing period, which can be six months or more.  The SBA reserves the right to request updated information at any time during the application process.

However, the OBTek OHA case had a very specific set of circumstances, which may not match the scenario of each potential applicant.  If you think that your firm may face a challenge on the 70% issue, we recommend that you speak to a qualified consultant before determining whether to proceed with an application for 8(a) Certification.

The risks are greater than merely a denial of 8(a) Certification.  If a firm is found to be economically dependent upon another entity, and a resulting size determination concludes that they are other than small, that would exclude the firm from being recognized as a small business for the purposes of contract awards.  This could be devastating to a small business.

To find out if you meet all of the SBA 8(a) Program eligibility requirements, please call us at 813-333-5800 or visit http://www.cloveer.com for a Free Consultation.

A list of items required for HUBZone Certification

A list of Items required for HUBZone Certification

1. SAM, SBA DSBS and DUNS profiles (all registrations must match address of principal office of the firm).

2. Identification of Primary NAICS code for firm.

3. Identification of Principal Office, Other Offices, Jobsites and Business mailing address if different from principal office address. Also provide the days and hours each office is staffed.

4. Average number of employees on the payroll during the last 12 calendar months.

5. Lease/rental agreement for principal office and any other offices. The lease agreement must identify the full name of the business and the address indicated as the principal office. If the location is a residence, a copy of the deed must be provided.

6. Liability Insurance for principal office.

7. Utility bill or Telephone bill (for period covering date of electronic submittal). This bill must identify the full name of the business and the address indicated as the principal office.

8. A copy of the most recent Balance Sheet and Income Statement for firm.

9. Last three (3) years of business’ tax returns, including all schedules and attachments, or as many as the firm has, if less than 3 years for the applicant firm.

10. Last three (3) years of business’ tax returns, including all schedules and attachments, or as many as the firm has, if less than 3 years for all affiliate firms.

11. Most recent personal Federal tax return for all owners, including all schedules,  attachments and W-2′s.

12. Citizenship documentation of all business owner(s) that are U.S. citizens

13. Payroll report covering date of electronic submission.

14. Does the company have an ESOP plan? Copy of ESOP plan must be provided, if applicable.

15. Does the company have any Joint Venture agreements? Copy of Join Venture plan must be provided, if applicable. Additional information may be needed on the JV and any affiliates.

16. For anyone who is a stock holder, board member or officer – do they have ownership or hold a position in another company? If yes, they must provide the last three years of taxes for each company identified. Additional information may be needed, if the primary NAICS code is a based upon employees vs. dollars.

If the Firm is a Corporation:

1. Copy of firms Articles of Incorporation and any amendments and foreign filings

2. Copy of any DBA or Fictitious Business Name Filings

3. Copies of all issued/cancelled stock certificates (front and back), and stock ledger

4. Corporate Bylaws and any amendments

5. Current Certificate of Good Standing from each state you operate within

6. Listing of all current board members

If the firm is a Limited Liability Company (LLC)

1. Copy of the firms Articles of Organization and any amendments and foreign filings

2. Copy of any DBA or Fictitious Business Name Filings

3. Copy of the firms Operating Agreement and any amendments

4. Current Certificate of Good Standing from each state you operate within

If the firm is a Partnership

1. Copy of the firms Partnership Filing and any amendments and foreign filings

2. Copy of any DBA or Fictitious Business Name Filings

3. Partnership Agreement and any amendments

4. Current Certificate of Good Standing from each state you operate within

If the firm is a Sole Proprietor

1.Copy of any DBA or Fictitious Business Name Filings

All other information required:

1. HUBZone maps of employees’ home address

2. Most recent State Unemployment tax filing/report and Federal Form 941

3. Valid (unexpired) Drivers License, DMV ID or voter registration cards for each employee residing in a HUBZone

4. Provide a listing of any paid or unpaid owners, for salary or hourly employees or any other individuals who work for the firm. List should include full name, home address, number of hours worked per week and work location(principal office, other office, or job site).

5. Identify if there are any shared employees, shared facilities or equipment, shared licenses required to do business or bonding assistance between the applicant firm and any affiliates.

6.If you use independent contractors, you must provide:

a. The complete name(s) of all independent contractor(s); b. Signed copies of all executed contracts; c. Detailed description of work performed by all independent contractors including the number of hours work, the type of work performed, and where they perform their work. d. Copies of all invoices from the independent contractors, and proof of payment for all invoices; e. If any of the independent contractors have or have had in the past, business cards issued by your firm, please provide a copy of the business card; f. If any of the independent contractors have email accounts issued to them by your firm, please provide the individual’s email address.

7.Signed and Notarized HUBZone Program Certification Signature Sheet

For more information and assistance with your HUBZone Application, please call us at 813-333-5800 or visit http://www.cloveer.com/hubzoneapplication.html.