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 $750,000 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.


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 Personal Financial Statement. Along with the personal financial statement you may 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 $750,000 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.

2 thoughts on “Important Fact about 8(a) Adjusted Net Worth Requirements

  1. Valuable blog post . I learned a lot from the info . Does anyone know where I might be able to locate a fillable 2012 SBA 413 example to work with ?

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