The 8(a) Social Disadvantage Eligibility Explained

SBC Consultants JPG

One important requirement  of the 8(a) Certification is that you meet not only the Economic definition of disadvantage but also the Social definition of disadvantage.

What does it mean to become Socially Disadvantaged?

For the purposes of the 8(a) program, the SBA deems certain minority sectors as Socially Disadvantaged. This is because, throughout the course of history, the SBA feels that certain groups have been discriminated against and therefore have not had the same opportunities as others. These presumed groups are:

  • Black Americans
  • Hispanic Americans
  • Native Americans
  • Asian Pacific Americans
  • Subcontinent Asian American

If you do not find yourself in one of these groups, you may still apply for the 8(a) certification as long you prove to the SBA how you have been held back. “To do so, the business must prove to SBA that the individual(s) meeting SBA’s ownership and control requirements is socially disadvantaged. This process includes showing personal experiences where applicable in education, employment, and business history.”

There is no getting around this easily, so making up stories will not work. The SBA is very strict when they say proof must be given through a preponderance of evidence. To prove social disadvantage, the individual owners must ultimately show that such personal experiences had a negative impact on entry into or advancement in the business world.

Evidence Requested by the SBA for those not included in any of the above presumed groups:

  • At least one objective distinguishing feature such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged.
  • Personal experiences of substantial and chronic social disadvantage in American society, not in other countries.
  • Negative impact on the individual’s entrance into the business world or advancement in the business world because of the stated disadvantage(s).
Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400