Types of Business Certifications

 WBE – Woman Business Enterprise:  gender specific certification. Certified by the WBENC, also by state & local governments.

 

WOSB – Woman Owned Small Business: Certification required for a specific Federal purchasing program that has set-aside quotas for women owned businesses.

 

8(a) Designation: Business development/mentoring program offered by SBA for a company considered disadvantaged.  8(a) certification is part of that program.

 

8(m) – EDWOSB – Economically Disadvantaged Woman-Owned Small Business: Federal certification for woman owned small businesses.  Set-aside program

 

SDB - Small Disadvantaged Business: certification is for businesses 51% owned by individuals who are both socially & economically disadvantaged but not participating in the 8(a) program.

 

DV – Disabled Veteran certification is for US Armed Forces veterans disabled in action

 

MBE – Minority Business Enterprise: certification is race-based for minority-owned businesses.

 

SBE - Small Business Enterprise: SBE is a company level diversity certification. SBE certifications are usually issued by the local or state government. Eligibility for certification as a Small Business Enterprise varies depending on the issuer; requirements may relate to number of employees, length of time the company has been in business and the net worth of the company's owner.  SBE certification is non-industry specific.

 

DBE – Disadvantaged Business Enterprise: State Certification. DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations.  African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged.  Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.

 

 8(a) Application Qualifications:

  • In your SBA 8a application development, you must be a small business concern based on applicable size standards for small businesses in your industry.

  • All individuals upon whom eligibility is based must be U.S. citizens.

  • You must be the unconditional majority business owner.

  • Outside business interests are strictly limited.

  • You must work full-time in your business.

  • You must be in immediate charge of your business.

  • You must possess good character and demonstrate the potential for success in the 8a Program

  • Board control in the case of a small business corporation can be exercised only by disadvantaged persons.

  • Ultimate control of your company must not reside with anyone other than those upon whom 8(a) certification eligibility is based.

  • You must be an economically disadvantaged person. For the 8(a) program this means all applicant individuals must have a net worth of $250,000 or less, excluding the value of the business and personal residence.

  • You must be in business for at least two years or apply for a waiver of the two-year requirement.

  • You must not have any significant unresolved federal or state tax financial issues.

  • You must be of a good moral character to be approved for 8a status.

  • You must not run a business that is not eligible for certification.

 To get your 8a status and take advantage of federal contracts opportunities, SBA 8a program requirements and qualifications that you must be a socially disadvantaged individual. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. 

8(m) Requirements (EDWOSB) – Economically Disadvantaged Woman-Owned Small Business:

·         51% of business must be owned by one or more women

·         Business must be managed by a woman

·         Daily business operations must be controlled by a woman

·         Woman must be a registered U.S. Citizen

·         Personal net worth must be less than $750,000

·         Average adjusted gross yearly income over the three years before certification cannot exceed $350,000

·         All assets including primary home and value of business can not exceed $6 million

·         Woman must hold the highest officer position in company

 

SDB Qualifications – Small Disadvantaged Business

Qualifications for the program are similar to those for the 8(a) Business Development Program. A small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to qualify. Other individuals can qualify if they show by a "preponderance of the evidence" that they are disadvantaged. All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry.

Once a Small Disadvantaged Business (SDB) is certified and listed on the public registry, it will be eligible for preferences under new federal procurement regulations. The main preference is a "price evaluation adjustment" of up to ten percent for SDBs bidding as prime contractors. The price adjustment means an SDB won't have to be the lowest bidder to win a contract award. The rules also provide a system of preferences for large businesses that use SDBs as subcontractors.

Firms that are 8(a) certified are certified as SDBs.

Click http://www.sba.gov/content/small-business-certification-0 to apply for SDB Certification.

There are two major differences between the SDB, 8(a), and HUBZone Programs.

1.  SDB and HUBZones are essentially contractor programs designed to expand economic opportunity for disadvantaged businesses.

2.  In contrast, 8(a) is a business development program that is characterized by a tangible relationship with the SBA, one that provides business advice and coaching. This is not the case for the SDB and HUBZone Programs.  8(a) certified companies are assigned a Business Opportunity Specialist (BOS), an SBA employee, who advises and coaches them in business matters.

You can apply to all certification programs.  Under the right circumstances, an applicant can qualify for all three certification programs.  An example of this would be an 8(a) eligible business located in a Historically Underutilized Business Zone.