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Grow Your Business Finances

SBA 8(a) Loan Changes Go Into Effect Today

Today, the Small Business Association’s (SBA) revisions to its rules governing the 8(a) Business Development program go into effect. These new changes will enable more small businesses to qualify for the program and access a variety of business development services, including the opportunity to receive federal contracts on a sole-source or limited competition basis. The changes also strengthen the overall program for existing 8(a) firms so that the benefits go to deserving small businesses.

The 8(a) Business Development Program is a business assistance program for small disadvantaged businesses that helps them engage in bidding for public contracts for work. It offers a broad scope of assistance to firms that are owned and controlled at least 51 percent by socially and economically disadvantaged individuals, according to the SBA.

Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing. 8(a) firms are also able to form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract, the SBA web site explains.

Lourdes Martin-Rosa, American Express OPEN Advisor on Government Contracting, offers small business owners tips on how they can most benefit from changes to the 8(a) program.

Explore the 8(a) program to see if you qualify: The 8(a) program is for small firms that are socially and economically disadvantaged. To qualify, a firm can’t exceed a certain size limit, which varies by industry; has to be able to meet certain economic criteria; and show that it is socially disadvantaged, meaning minority-owned or disadvantaged.

If you qualify, make sure that your financial house is in order: The SBA requires a huge quantity of documentation on every aspect of the business and its owners. They want to see everything, so make sure that your business is being run very cleanly.

If you don’t qualify, explore other SBA certifications that give you a competitive edge: The government recognizes a number of small business certifications including Small Business, Small Disadvantaged Business, Service-disabled Veteran-Owned Business and HUBZone Business.

If your business is women-owned, familiarize yourself with the SBA’s newly created Women-Owned Small Business Federal Contract Program. A checklist to determine your business’ eligibility can be found on OPEN Forum.

Team to help win government contracts: If you are new to government contracting, teaming can help you gain the experience and credibility you need to be awarded more government contracts. With various set-aside contracting programs for small businesses, partnering with an 8(a) or women-owned firm can help increase your chances of winning contracts.