This article provides an overview of programs and certifications offered by the U.S. Small Business Administration (SBA) that benefit women, veterans, and disadvantaged groups. Specifically, this article discusses the following SBA programs:

• WOSB and EDWOSB: Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
• VOSB and SDVOSB: Veteran-Owned Small Business and Service-Disabled Veteran-Owned Small Business
• WBENC: Women’s Business Enterprise National Council
• 8(a): Section 8(a) Business Development Program (socially and economically disadvantaged individuals)
• HUBZone Program: Historically Underutilized Business Zone Program

General WOSB & VOSB Requirements

The WOSB and VOSB programs aim to increase federal contracting opportunities for women-owned businesses and veteran-owned businesses.

1. General WOSB & VOSB Program Requirements
In general, to qualify as a WOSB or VOSB, the business must be:

• • a small business according to SBA size standards;
  • at least 51% owned and controlled by women or veterans who are U.S. citizens; and
  • women or veterans must manage the day-to-day operations and also make long-term decisions.

A. Small Business Requirement
The SBA’s size standards define whether a business constitutes a “small business” based on its industry or economic activity as classified under the North American Industry Classification System (NAICS). Businesses can enter their NAICS code, as listed in its System for Award Management (SAM) profile, on the SBA’s website (sba.gov/size-standards/index.html) to determine if it qualifies as a small business.

B. 51% Ownership Requirement
To qualify as a WOSB or VOSB, women or veterans must “unconditionally” and “directly” own at least 51% of the business. For ownership to be “unconditional,” ownership must not be subject to any conditions, executory agreements, voting trusts, or other arrangements that divert ownership benefits to another person, except in cases after death or incapacity. Ownership must also be held “directly,” meaning, not through another entity or trust, such as an employee stock ownership plan (ESOP). However, if ownership is held through a revocable living trust where the woman or veteran is the grantor, trustee, and sole beneficiary, then it will be treated as direct ownership.

In partnerships or limited liability companies, women or veterans must own at least 51% of each type of ownership interest. For corporations, they must own at least 51% of the company’s stock, both in terms of its voting stock and total outstanding shares.

C. Management & Day-to-Day Decision-Making Requirement
To qualify as a WOSB or VOSB, women or veterans (as applicable) must control the management and daily operations of the business. They must hold the highest officer position in the business, with ultimate managerial and supervisory control. They are not, however, required to possess the professional or occupational license needed to operate in the industry, nor do they need to have the technical skills for specific tasks within the business. They are, however, limited on having any outside employment that would prevent them from dedicating a sufficient amount of time to run the business.

2. General EDWOSB Requirements
The SBA further sets aside federal contracts exclusively for businesses that qualify as an EDWOSB. To qualify, a business must satisfy the WOSB requirements regarding size and women’s ownership and control. It must also meet the following additional criteria: (i) the business must be controlled by one or more women, each with a personal net worth less than $850,000; (ii) each must have an average adjusted gross income of $400,000 or less over the previous three years; and (iii) each must have personal assets of $6.5 million or less.

3. General SDVOSB Requirements
Similarly, the SBA sets aside specific federal contracts for businesses that are certified SDVOSBs. To qualify as an SDVOSB, a business must be defined as a small business, as outlined in Section 1A of this article, and 51% owned and controlled by one or more service-disabled veterans. If the Secretary of Veteran’s Affairs determines that a veteran has suffered a permanent and total disability, the veteran’s spouse or permanent caretaker may qualify a business as an SDVOSB.

Women’s Business Enterprise National Council Certification

A WOSB or EDWOSB may also benefit from pursuing a separate certification from the Women’s Business Enterprise National Council (WBENC), which is a private, non-profit organization offering various opportunities and benefits for women-owned businesses. These opportunities include access to networking, executive education and mentoring events, and eligibility for regional and national awards and recognition.

The WBENC is also a third-party certifier for the WOSB designation issued by the SBA. Generally, the WBENC certification process includes many of the same requirements as the WOSB, such as the business being at least 51% owned, controlled, and managed by women. In its application, a business must submit various documents including proof of ownership, financial statements, three years of Federal Income Tax returns, corporate documents, proof of U.S. citizenship or legal residency, and employment and management documentation. Additionally, the WBENC requires an on-site interview with the female owners.

The 8(a) Business Development Program

The SBA’s 8(a) Program supports small businesses owned by socially and economically disadvantaged individuals by providing technical training and assistance. Participants in the program can also receive set-aside and sole-source federal contracts, strengthening their ability to compete effectively in the marketplace.

1. General 8(a) Requirements
For a business to qualify under the 8(a) Program the business must:

• be a small business, as outlined in section 1A of this article;
• not have previously participated in the 8(a) Program;
• be at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged;
• have a personal net worth of $850,000 or less, an average gross income of $400,000 or less over the past three years, and total assets of $6.5 million or less;
• the business owner must demonstrate good character; and
• must demonstrate success such as having been in business for two years immediately prior to the date of its 8(a) application.

A. Socially Disadvantaged
To qualify under the 8(a) Program, the 51% owner and controller of the business must be socially disadvantaged. The SBA presumes that certain individuals are socially disadvantaged including Black Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans, among many more. If an individual is not one of the groups presumed by the SBA to be socially disadvantaged, they may present facts and evidence that they have suffered social disadvantage.

B. Good Character
To qualify for the 8(a) Program, applicants and their principals must demonstrate good character. If the SBA receives adverse information about possible criminal conduct, it may pause the application and refer the case to the Office of Inspector General (OIG). The SBA considers the OIG’s findings and any regulatory violations when determining eligibility. Businesses owned by debarred individuals or those lacking business integrity due to indictments, guilty pleas, convictions, or legal judgments are ineligible. Knowingly submitting false information results in application denial or program termination.

C. Potential for Success
The SBA must determine that the applicant can successfully perform 8(a) contracts and compete in the private sector with the program’s support. Applicants must show they’ve operated in their primary industry and received contracts for at least two years prior to applying, unless granted a waiver. The SBA can waive the two-year requirement if the applicant demonstrates substantial business management experience, technical capability, adequate capital, a record of successful contract performance, and the necessary personnel and resources to perform contracts.

The HUBZone Program

The HUBZone program is an initiative by the SBA to promote economic development and employment growth in distressed areas by providing access to federal contracting opportunities. Businesses located in designated HUBZones and employing staff who live in these areas can receive preferential consideration for federal contracts, including set-aside contracts. The program aims to stimulate job creation and investment in economically disadvantaged communities.

For a business to qualify under the HUBZone Program, the business must:

• be a small business as set forth in Section 1A of this article;
• be at least 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization, or an Indian tribe;
• have its principal office located in a HUBZone; and
• have at least 35% of its employees living in a HUBZone.

Conclusion

The SBA’s programs are essential for supporting small businesses owned by women, veterans, and disadvantaged groups, providing them with vital resources and opportunities. Small businesses should explore their potential qualification for these advantages.