The Benefits of an SBA Certification

Written by Kristine Jacobson | Feb 6, 2017 9:22:42 PM

The Different SBA Certification

There are several programs offered by the Small Business Administration (SBA) that can be advantageous to your business – if you qualify. The programs center around socially and economically disadvantaged business owners, veterans, and Historically Underutilized Business Zones (aka, HUBZones). If your business can be certified in one of these areas, the benefits of SBA Certification can be significant when it comes to competing on government contracts.

There are five major SBA government contracting designations:

  1. Woman-Owned Small Business – Also known as WOSB, if your business is at least 51% owned by a woman who runs the business full-time, then you may qualify. Check other qualifications here. If you meet the requirements, you can self-certify your business through the SBA’s online dashboard.
  2. Small Disadvantaged Business – Called SDB, businesses who qualify for this certification can simply claim it; there is no application process or certification needed. Requirements include being owned and managed – at least 51% - by someone who is socially and economically disadvantaged.
    Socially disadvantaged individuals include Americans who have been categorized by their:
    • Gender;
    • Race;
    • Ethnicity;
    • Physical handicap; or
    • Long-term residence in a remote environment.Economically disadvantaged individuals must prove that their ability to compete has been hindered due to restricted access to capital and credit.

    To determine if your business is economically disadvantaged, the SBA will look at:
    • Asset values;
    • Income;
    • Net worth;
    • Retirement funds;
    • Tax payments;
    • Your spouse’s financial situation; and
    • Your race or ethnicity.

  3. 8(a) Business Development Program – The 8(a) program comes with many features, but the application process is somewhat intense. 8(a) offers SDBs assistance in the form of business planning, specialized training, marketing support, and executive development. It provides competitive advantages to SDBs when competing on government contracts - like being able to receive sole-source contracts.
    There are many requirements that go beyond the SDB designation for 8(a) status, like being able to prove you are a small business (size-wise) with the potential to succeed in the marketplace, so make sure that you take all the prerequisites into consideration.
  4. Service-Disabled Veteran-Owned Business – Another certification that enables sole-source contracts, the SBA calls its program the Service-Disabled Veteran-Owned Small Business Concern Program – or SDVOSBC. The key to eligibility in this program centers on receiving a Service-Disabled Veteran (SDV) status from the Department of Veterans Affairs or the Department of Defense.
  5. HUBZone – You can apply for a HUBZone designation online, but there are many registration requirements that need to be completed before you can even begin the application process.
    The most important qualifications for HUBZone status are:
    • At least 35% of your employees must live in a HUBZone
    • Your main office must be located within a HUBZone
    • Your business must meet small business size requirements as determined by the SBA

The Benefits of Certification

Although some benefits were mentioned briefly above, if you plan on doing business with the Federal government, certain SBA designations can allow you to receive sole-source contracts – which means that you do not have to compete against any other businesses. The 8(a) designation even allows you to form a joint venture to bid on contracts that are too large for your firm to handle.

When it comes to being part of the SDVOSBC program, those business owners are not only eligible for sole-source contracts, but they are also eligible for special contracts that can be set-aside for sole SDVOSBC competition.

Is the Process Worth It?

If you qualify for a designation and would like to work on Federal projects, then the simple answer is, "yes." While getting certified as a SDVOSBC or 8(a) business can be time-consuming, it also offers your business a distinct competitive advantage in the Federal contractor marketplace. If you don't foresee working with the government, then this process may not be worth your time. Consult with your local SBA office to see what is right for you and your business.

Note here about what Conveyance Marketing Group is certified as – Conveyance Marketing Group is a Woman-Owned Small Business and is currently applying for HUBZone status.
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