8(a) Certification – Contract Listing Report, Copies of Contracts and Letters of Reference

When you apply for the SBA 8(a) Program the SBA will require that you provide a detailed listing of your contracts* for the current year, through the most recently completed month, and at least the last two years along with 2 -3 letters of reference from current or past clients. You may also have to provide the SBA a copy of your client contracts for the last 12 calendar months.

*The term contract means contract, agreement, PO, etc.

The contract listing breakdown. You must detail the following to the SBA:
1. Contract Name. List the name of the contract, if applicable. (e.g., DISA Contract)
2. NAICS Code. List the six digit NAICS code which you are performing the work under. (e.g., 541511)
3. Award Date. List the date the contract was awarded (e.g., 01/01/2015)
4. Customer Name (Billable Client). List the name of the customer/client you are billing for the work being performed. (e.g. Lockheed Martin)
5. Description. Provide a brief description of the work being performed for the client. (e.g., Web based software application for DISA)
6. Total Dollar Value of Contract. List the total value of the contract. (e.g. $100,000 or TBD, ongoing if no total value)
7. Revenue earned from Client. List the amount of revenue your company has earned from this client in the current year to date and the last two fiscal years. (e.g., $53,275)

See below for a example.

sample contract listing

Sample Contract Listing

You must also prepare another breakdown for the last 12 calendar months of your revenue too. See Below for an example.

Last 12 Months of Contracts

Last 12 Months of Contracts

The SBA will also use the above breakdown’s to look at your economic dependency over these periods of measurement to see if you are or have been earning more than than 70% of your revenue from one billable client. See our blog posting on economic dependency for more information on this topic.

Reference Letters:
As stated above the SBA will also require 2-3 letters of reference from current or past clients that speak to your performance on the work performed. The letters should be on the letter writers letterhead, provide a brief description of the work performed and whether it was performed successfully, and also contain the letter writers contact information and signature.

Copies of Contracts:
Although not specified by the SBA in their 8(a) Application checklist you should gather and store electronic copies of all contracts, agreements, PO’s, etc between your firm and the client for the last 12 months as you have reported within the last 12 months of contracts/revenue breakdown. Be sure that all documents are duly signed by all parties, if the SBA requests this information from you.

Need assistance with your 8(a) Application? With 15 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 cloveer.com to discover what Cloveer can do for you.

 

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Certificate of Good Standing. Where to obtain one for my 8(a) Application or HUBZone Application.

When applying for the 8(a) Program or HUBZone Program you are required to provide the SBA with a copy of a current Certificate of Good Standing that is no older than 90 days old when your application is submitted. Some States refer to the the Certificate of Good Standing as a Certificate of Existence, Compliance, Status or Authorization. Below is a links to obtain this required document.

Alabama

Referred to as a Certificate of Existence
Link to obtain: https://www.alabamainteractive.org/sos_eCertificate/welcome.action

Alaska
Referred to as a Certificate of Compliance
Link to obtain: https://www.commerce.alaska.gov/web/cbpl/corporations/certificateofcompliance.aspx

Arizona

Referred to as a Certificate of Good Standing
Link to obtain: http://www.azcc.gov/Divisions/Corporations/CertGoodStanding.asp

Arkansas

Referred to as a Certificate of Good Standing
Link to obtain: https://www.ark.org/sos/good_standing/index.php

California

Referred to as a Certificate of Good Standing
Link to obtain: http://www.sos.ca.gov/business-programs/business-entities/information-requests/

Colorado

Referred to as a Certificate of Good Standing
Link to obtain: https://www.sos.state.co.us/biz/BusinessFunctions.do

Connecticut

Referred to as a Certificate of Legal Existence
Link to obtain: http://www.concord-sots.ct.gov/CONCORD/online?eid=7000&sn=ColeOnline

Delaware

Referred to as a Certificate of Status
Link to obtain: https://corp.delaware.gov/directweb.shtml

District of Columbia (DC)

Referred to as a Certificate of Status
Link to obtain: https://dcra.dc.gov/book/corporate-registration-faqs/corporate-registration-faqs-process

Florida

Referred to as a Certificate of Status
Link to obtain: http://dos.myflorida.com/sunbiz/manage-business/certification/

Georgia

Referred to as a Certificate Existence
Link to obtain: https://ecorp.sos.ga.gov/CertificateOfExistence

Hawaii

Referred to as a Certificate of Good Standing
Link to obtain: https://portal.ehawaii.gov/home/online-services/certificate-of-goods-standing/

Idaho

Referred to as a Certificate of Good Existence
Link to obtain: https://sos.idaho.gov/CORP/certificate_of_existence.html

Illinois

Referred to as a Certificate of Good Standing
Link to obtain: https://www.ilsos.gov/corporatellc/

Indiana

Referred to as a Certificate of Existence
Link to obtain: https://inbiz.in.gov/business-filings/information-requests

Iowa

Referred to as a Certificate of Existence
Link to obtain: https://sos.iowa.gov/business/FormsAndFees.html#CertsAndCopies

Kansas

Referred to as a Certificate of Good Standing
Link to obtain: https://www.kssos.org/other/certificate_good_standing.html

Kentucky

Referred to as a Certificate of Existence
Link to obtain: http://www.sos.ky.gov/bus/businessrecords/Pages/default.aspx

Louisiana

Referred to as a Certificate of Good Standing
Link to obtain: http://www.sos.la.gov/BusinessServices/SearchForLouisianaBusinessFilings/OrderDocumentsAndCertificates/Pages/default.aspx

Maine

Referred to as a Certificate of Existence
Link to obtain: https://icrs.informe.org/nei-sos-icrs/ICRS

Maryland

Referred to as a Certificate of Status
Link to obtain: http://dat.maryland.gov/businesses/Pages/Internet-Certificate-of-Status.aspx

Massachusetts

Referred to as a Certificate of Good Standing
Link to obtain: https://mtc.dor.state.ma.us/mtc/_/

Michigan

Referred to as a Certificate of Good Standing
Link to obtain: http://www.michigan.gov/sos/0,4670,7-127-5647_12539_71074-33117–,00.html

Minnesota

Referred to as a Certificate of Status
Link to obtain: http://www.sos.state.mn.us/business-liens/business-help/how-to-order-copies-of-filings-certificates/

Mississippi

Referred to as a Certificate of Status/Good Standing/Existence
Link to obtain: http://www.sos.ms.gov/BusinessServices/Pages/Order-Documents.aspx

Missouri

Referred to as a Certificate of Good Standing
Link to obtain: https://www.sos.mo.gov/business/formsAndServices

Montana

Referred to as a Certificate of Existence
Link to obtain: https://sos.mt.gov/business

Nebraska

Referred to as a Certificate of Good Standing
Link to obtain: http://www.sos.ne.gov/business/corp_serv/

Nevada

Referred to as a Certificate of Good Standing
Link to obtain: http://nvsos.gov/sos/businesses/commercial-recordings/faqs#59

New Hampshire

Referred to as a Certificate of Good Standing
Link to obtain: http://sos.nh.gov/corpfaq.aspx

New Jersey

Referred to as a Certificate of Standing
Link to obtain: http://www.state.nj.us/treasury/revenue/dcr/programs/ann_rptdue.shtml

New Mexico

Referred to as a Certificate of Good Standing
Link to obtain: http://www.sos.state.nm.us/Business_Services/good-standing-and-status-certificate-information-and-fees.aspx

New York

Referred to as a Certificate of Status
Link to obtain: https://www.dos.ny.gov/corps/faq_certificates_under_seal.page.asp

North Carolina

Referred to as a Certificate of Good Standing
Link to obtain: http://www.dor.state.nc.us/taxes/corporate/lettergoodstanding.html

North Dakota

Referred to as a Certificate of Good Standing
Link to obtain: https://sos.nd.gov/business/business-services/business-services-faqs

Ohio

Referred to as a Certificate of Good Standing
Link to obtain: https://cogs.sos.state.oh.us/(S(2g3njebc2opd3omrdqi4crki))/index.aspx

Oklahoma

Referred to as a Certificate of Good Standing
Link to obtain: https://www.sos.ok.gov/corp/order/orderDefault.aspx

Oregon

Referred to as a Certificate of Existence
Link to obtain: http://sos.oregon.gov/business/Pages/business-registry-certificates.aspx

Pennsylvania

Referred to as a Certificate of Good Standing
Link to obtain: http://www.dos.pa.gov/Businesscharities/Business/Resources/Pages/Good-Standing-Or-Subsistence-Certificates.aspx

Rhode Island

Referred to as a Certificate of Good Standing
Link to obtain: http://sos.ri.gov/divisions/Business-Portal/Certifications-Apostille-Goodstanding

South Carolina

Referred to as a Certificate of Existence
Link to obtain: https://web.sc.gov/SOSDocumentRetrieval/Welcome.aspx

South Dakota

Referred to as a Certificate of Good Standing
Link to obtain: https://sdsos.gov/business-services/corporations/request-certificate-good-standing.aspx

Tennessee

Referred to as a Certificate of Existence
Link to obtain: http://sos.tn.gov/products/business-services/request-certificate-existence-0

Texas

Referred to as a Certificate of Status/Existence
Link to obtain: https://www.sos.texas.gov/corp/copies.shtml

Utah

Referred to as a Certificate of Existence/Good Standing
Link to obtain: https://corporations.utah.gov/inetcorpdocs.html#Existence

Vermont

Referred to as a Certificate of Good Standing
Link to obtain: https://www.sec.state.vt.us/corporationsbusiness-services/good-standing-status-certificates.aspx

Virginia

Referred to as a Certificate of Good Standing/Existence
Link to obtain: https://www.scc.virginia.gov/clk/copy.aspx

Washington

Referred to as a Certificate of Existence/Authorization
Link to obtain: https://www.sos.wa.gov/corps/OrderDocs.aspx

West Virginia

Referred to as a Certificate of Existence/Authorization
Link to obtain: http://www.sos.wv.gov/business-licensing/business/Pages/copiesandcertificates.aspx

Wisconsin

Referred to as a Certificate of Status
Link to obtain: https://www.wdfi.org/corporations/fees/cert_program_inst.htm

Wyoming

Referred to as a Certificate of Good Standing
Link to obtain: https://wyobiz.wy.gov/business/viewcertificate.aspx

 

8(a) Certification: Family members with ownership in another business. What do I need to know and provide?

When you apply for the 8(a) Program the SBA will ask if you have any immediate family members who have ownership in a business. Why? 13 C.F.R 121.103(f) defines that the SBA may find affiliation on an identity of interest between individuals or business, including family members.

Immediate family member is defined as father, mother, husband, brother, sister, grandfather, grandmother, grandson, grand-daughter, father-in-law, and mother-in-law.

Tip: They do not ask this question upfront. To alleviate any questions by the SBA during the review process you should provide a signed and dated certification that you or any immediate family members do not have ownership in any other business during the application submission process, if this is the case.

If you do have an immediate family member that has ownership interest in any other business you must provide the following documentation to the SBA:

The above must be supplied if any immediate family member, any owner of more than 10%, any director, any officer has ownership in any other business entity.

  1. SBA Form 355 (listing each firm as an alleged affiliate);
  2. Interim year to date financial statements, as well as number of employees;
  3. Three most recently filed business tax returns, including all schedules, attachments, and proof of tax paid;
  4. If the firm is a corp, provide:
    – Articles of incorporation and by-laws;
    – The last two years of  shareholder meeting minutes showing the election of the board of directors;
    – The last two years of board of director meeting minutes showing the election of the officers;
    – Stock certificates and ledger;
    – Assumed/fictitious name registration, if dba name is used;
    Copies of cert of good standing if your firm is a foreign firm; and;
    – Any buy/sell agreements, stock transfer agreements, etc.
    If the firm is a LLC, provide:
    – Articles of organization and operating agreement;
    – Assumed/fictitious name registration, if a dba name is used;
    – Certificate of good standing; and
    – Any buy/sell agreements, stock transfer agreements, etc.If the firm is a sole prop, provide:
    – Assumed/fictitious name registration.If the firm is a partnership, provide:
    – Partnership agreement;
    – Official filings with the state; and
    – Assumed/fictitious name registration, if a dba name is used.

Why do they require this information?
The SBA requires the above information to determine if any affiliation exists between the 8(a) Applicant firm and any other business that your family member owns.

Need assistance with your 8(a) Application? With 15 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.

 

 

8(a) Certification: Ownership or outside work in any other business can be a certification show stopper!

The applicant(s) for 8(a) Certification must devote full-time to the business that is applying for the 8(a) Program with no outside employment. This means that they must generally work at least 40 hours a week during the normal hours of operation of the business that is applying for the 8(a) Program.

If the applicant(s) have an ownership or are an officer, director or partner  in any other business, other than the business that is applying for the 8(a) Program, the SBA may very well deny your 8(a) Application.

Why?

As stated above, you must devote full-time during the normal hours of operation of the business. If you have ownership or are an officer, director or partner in another business the SBA will likely conclude that you are not devoting full-time to the applicant business even if you do not devote any hours to the operation of this other business.

How to overcome this potential show-stopper?

a. You can dissolve this other business and provide evidence of dissolution to the SBA during the application review process.

b. You can formally resign your officer, director or partner position in this other business and provide evidence of resignation.

b. You can sell your ownership in this other business. The sale must take place at fair market value and you must be able to provide proof of the sale and a copy of any proceeds you might receive. Be sure to factor in any funds you receive as a result of this sale. You must also resign all positions you held in this other business and provide proof of this resignation.

What if the other business is just a business for holding real estate?

If the other business is just for holding real estate and you can prove this to the SBA, you can most likely keep your ownership in this other business since this other business is solely for the purpose of holding and/or protecting you ownership interest in the properties that it holds.

Need assistance with your 8(a) Application? With 15 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.

8(a) Application – New Procedure for Submitting your 8(a) Application

The SBA has recently changed its method for submitting your 8(a) Application supporting documents.

On August 24, 2016, the SBA updated Title 13 of the Code of Federal Regulations (C.F.R.) Part 124. Among one of the updates, the SBA included a requirement that all 8(a) Applications along with supporting documentation must now be filed electronically.

Because of this change, the SBA now (as of February 10, 2017) requires that you submit your entire 8(a) Application electronically instead of mailing the completed 8(a) Application and supporting documentation to them. Please note, this has been noted as an interim process therefore please stay tuned to our blog for further updates to the submission process.

(You can download the Interim Process Guide by visiting https://certify.sba.gov/8a-docs). Please review the process in detail before submitting your 8(a) Application to the SBA. Here are the basic steps from the guide:

  1. You will still need to complete your 8(a) Application forms within the BDMIS system or via your SBA GLS account.
  2. To upload your supporting documents to the SBA, you will now need to establish an account with certify.sba.gov. Once you have established an account with certify.sba.gov and have selected the option for 8(a) Document upload under the Programs option within this system:

You must use the following naming convention when saving and uploading your 8(a) documents to the SBA: FIRM NAME_DUNS NUMBER_TYPE OF FILE.PDF.

For example, if you are uploading your 2015 personal tax returns, the PDF file should be named: ABC LLC_123456789_2015 Personal Federal Tax Return.PDF

All files must be uploaded as separate documents.

  1. You will also need to upload your BDMIS Application completed through your SBA GLS account with all executed signature pages.
  2. For all further instructions, please review the guide mentioned above.

Tips to select the right consultant to prepare your 8a, HUBZone or VetBiz Application.

1. Pick up the phone. Call them and speak to the actual person who will be preparing your application. 

You should be able to call them and speak directly to the individual(s) who will be responsible for preparing your application. At Cloveer, you can call and speak to the employee who will be responsible for preparing your application. They will answer any of your questions and let you know whether or not you are eligible to become certified into one of these programs at no cost. Call us at 813-333-5800 to get your questions answered.

2. Don’t choose your consultant solely on their price for services.

The old adage is true. You get what you pay for. If it looks to good too be true, it usually is.

3. Stay away from any consultant that offers you any type of guarantee.

The FAR prohibits any federal consultant to base any fee for their services contingent on certification.

4. Ask as many questions up front as possible. See if they actually know the rules and regulations of the program you want to get certified into. They should be able to answer your eligibility questions quickly and correctly.

Cloveer pre-qualifies all of its potential clients to make sure they meet all of the regulatory requirements.

5. Check the consultants Better Business Bureau report.

If they don’t have a profile established with the BBB, or have negative feedback, this is a sign of potential problems. Cloveer is an A+ Rated BBB business with zero complaints.

6. Ask them for references you can personally speak to and look for a recent track record of success.

Cloveer has real references that are published on our website that you can call and speak to.

7. Look at their website to see if they provide more than just sales information.

Cloveer.com has an extensive FAQ section along with a comprehensive blog on getting certified. We want you to understand as much as possible before making a decision on whether or not to pursue certification.

8.  Make sure that the agreement provided for services to be rendered covers everything.

All services provided by Cloveer are on a fixed price basis so there will be no hidden charges.

For More information on getting your 8a Certified, HUBZone Certified or VETBiz Certified, call us at 813-333-5800 or visit www.cloveer.com

 

Financial Statements – 35 Items the SBA reviews when applying for 8(a) Certification

When applying for the 8(a) Program you are required to submit the following financial statements for the business:

  1. Year to date Balance sheet and income statements, no older than 90 days, including a detailed A/P and A/R aging statement if you are operating on an accrual basis.

2. The last three years of Balance sheet and income statements (e.g. 2016, 2015, & 2014)

You should ensure that all financials provided are prepared on generally accepted accounting principles or an accepted cash basis.

What does the SBA reviewer look for when they review these:
*Note* The following items are taken from the current SBA SOP.

1. Are the current year to date financials no older than 90 days from date of receipt by the SBA?

2. Are the aging schedules for A/P and A/R consistent with with the year to date balance sheet?

3. Are any A/P or A/R more than 90 days old?

4. Do the balance sheets balance?

5. Are current assets recorded properly?

6. If the business is a dealer, wholesaler, or supplier, does the firm maintain any inventory?

7. Does the firm have fixed assets? If so, are these fixed assets recorded properly?

8. Are the fixed assets reported with depreciation or at actual value?

9. Do the firm’s fixed assets correspond with its type of business? For example, if the firm performs construction work does it have construction equipment?

10. If there is a partner shareholder or officer loan, is there a copy of the loan document? Is this loan reflected on the individual’s SBA Form 413, Personal Financial Statement?

11. Are there loans or notes receivable from a shareholder, officer or partner?

12. Has a copy of the loan or note been provided?

13. Does the loan reflect generally accepted repayment terms? If not, is this item over-inflating the firm’s assets?

14. Does the firm have the ability to service debts?

15. Are there any loans that are questionable or that may raise concerns regarding control?

16. Do retained earnings reconcile with previous financial statements?

17. Does the listed business equity match that reported on the Personal Financial Statements of the owners?

18. Is the profit and loss statement correctly calculated?

19. Does the profit and loss statement show revenues in the appropriate business activity?

20. Is “Cost of Goods Sold” included?

21. Are the line items properly recorded?

22. If there is an expense for salaries for employees, are employees listed on SBA Form 1010?

23. If there is an expense for worker’s compensation, are employees listed on SBA Form 1010?

24. Is the disadvantaged individual the firm’s highest compensated officer or employee? If not, has an explanation of the salary structure been provided?

25. Are there any large subcontracting expenses that appear questionable?

26. Does the firm appear to be in compliance with the percentage of work requirements for its primary business?

27. Does the firm appear to have the necessary equipment, financial resources, working capital, etc., to perform 8(a) contracts it may be awarded?

28. Are there questionable items listed on the statements, or have things changed significantly from the previous year end statement?

29. Are there indications that excessive withdrawals have occurred?

30. Does the firm have financing by non-disadvantaged individual(s) that would be considered critical financing? Also, is the loan payable upon demand?

31. Are there any significant changes in any categories that create a concern? For example, have loans disappeared?

32. What pattern are the revenues, profits, and losses showing? Is there a need to ask for clarification, such as an explanation of the reason for a downward trend or sudden revenue drop?

33. Are there any discrepancies between the firm’s tax returns and the statements? Are these discrepancies based on cash versus accrual? If not, is reconciliation required? Does taking into consideration cash versus accrual reconcile the accounts?

34. Do the balance sheets correspond with the tax return schedules? For example, are there shareholder loans on the tax return schedules that are not reflected on the financial statements?

35. Do the statements and corresponding tax returns reflect any conversions from accrual to cash accounting?

Need assistance with your 8(a) Application? Call us at 813-333-5800 or visit www.cloveer.com for more information.