8a certification is a business development program of the United States Small Business Administration. This program allows the small and disadvantaged businesses to get an access to the federal contracts. But there are many SBA 8a certification requirements, which a small firm needs to meet in order to become 8a certified.
Let us first discuss about the SBA 8a certification requirements:
- The firm must meet the SBA’s definition of a small business.
- The entrepreneur of the firm must be socially and economically disadvantaged.
- Majority of the company must be owned and controlled by a disadvantaged individual.
- The company should have experience of doing business in this industry for a minimum of two years.
- The entrepreneur must have a good character.
It is also important for you to know the financial actions, which you need to take for a successful 8a certification application. Here we have discussed about the financial actions, which a small company should take before applying for the certification. Take a look:
Pay off your federal debts
You should pay off all your federal debts like student loans, taxes or liens. If you are unable to pay off the federal debt fully, create a formal payment plan with a federal agency and keep the document of the payment plan for putting a copy inside your 8a certification application.
List your personal assets
You should make a list of all your personal assets and never forget one thing—if you’re married and own any asset jointly with your spouse, you should include that asset in the list with a note ‘50%’ beside so that you don’t forget that you actually own half of that asset. The Small Business Administration will want to know about every financial account or asset that you have. So, you must be very careful. Many people forget about some small checking accounts, which they established online and some 401K plans, which they left behind at their past jobs and never shifted it into their own brokerages.
List your liabilities
You should list all the liabilities you own–car payments, mortgages, HELOCs, credit card accounts etc. Remember, the Small Business Administration expects you to honestly and openly divulge the existence of liability and account, which you have. If you are married don’t forget to include the liabilities, which you have divided with your spouse in your list.
Arrange for documents that show your assets/liabilities present value
Each and every account you hold, be it liability or an asset, make sure you are able to provide a document to show its present value. Be methodological—you will require a document to prove the existence of every liability and asset because the Small Business Administration will not believe in your words or consider your company reputation.
Set aside the materials in a folder
You should set aside all the material in a folder. Keep that folder in a place from where you can access it easily when you work on your 8 a certification application. Make sure to complete your Personal Financial Statement (SBA Form 413) and update your account systems when needed. If you are married, your spouse will need to fill up an SBA Form 413 as well.
Once you take these financial actions, you will see that the process of 8a application certification will become easier for you. The Small Business Administration will want to know about every financial account or asset that you have. So, you must be very careful.So, make sure you follow the five above-mentioned before applying for the certification program.