Clarification 1: People with Heritage from the Iberian Peninsula (Spain/Portugal) are considered Hispanic for proving social disadvantage.
Clarification 2: People from the Middle East and North Africa can successfully apply, however they need a solid narrative.
Clarification 3: Native Alaskans, and Hawaiians often overlook their social disadvantage status.
Clarification 4: The Social Disadvantaged Individual or group of individuals needs to own 51% or more of the firm.
Clarification 1: If your business is a sole proprietorship, partnership, LLC or S Corp, the amount of income that rolls onto the owner's taxes does not count towards the $6,500,000 income threshold.
Clarification 2: Distributions that an owner takes from the firm that aren't used for taxes are added to their income and counts toward the $6,500,000 three year average.
Clarification 3: If an individual has money in excess of the $400,000 they can paydown the mortgage on their primary residence, which, in some cases, this can get them under the $400,000 threshold.
Clarification 4: The SBA will pull a credit report on the applicant, with the intention of looking for assets that have not been disclosed to the SBA.
Clarification 1: Only the 51% owner of the firm needs to work full-time for the business.
Clarification 2: If a firm has a long-standing client representing 100% of the firm’s business, and the firm loses this client, and obtains another client which now has 100% of the firm’s work, there is often a point in time where the firm becomes compliant with the 8(a) 70% rule and can apply for 8(a).
Clarification 3: The SBA waives the 70% rule for firms applying for 8(a) with a two-year waiver.
Clarification 1: Not more than 25% of the firm’s revenue should come from a past employer.
Clarification 2: The firm should not share employees, or office space with a past employer, or firm they have other dealings or entanglements.
Clarification 3: The owner of the firm should be the highest paid person at the firm, unless there is a strong and reasonable justification for this not being the case.