The completion of a Small Business Administration (SBA) 8a application can result in years of development assistance in categories ranging from business training to marketing. For any small business that meets the selection criteria, this partnership can prove to be especially vital for years. Naturally, the SBA does not hand out these certifications haphazardly. There are strict requirements that every business must meet, especially when it comes to finances. To improve your chance for successful certification, learn more about some of these financial criteria.
Sufficient Capital
This partnership is not designed to create businesses; it's intended to help existing business owners further their success. To show that you can meet this challenge, you need to have sufficient capital. Sufficient capital does not mean that you must have immediate access to large sums of money but that you instead have access to an appropriate amount of funds for your business to sustain. If you have concerns in this area, it's a good idea to increase your savings efforts where you can before you apply for certification.
Bonding Capability
Another advantage of this certification is that you often have the opportunity to procure federal government contracts. A major requirement in the contract process is bonding. You cannot be awarded a government contract without a bond. For this reason, you will have to certify your bonding capacity as part of the application process. This step involves certifying the amount of surety credit your organization can provide in the event of a partnership with the federal government.
Manageable Expenses
Just as you need to have access to a healthy amount of cash flow, you also need to have a set of expenses that can be realistically managed. For example, based on your sale records, meeting standard obligations like mortgage or rent payments and payroll should not be a strain. If there is any concern that your debts exceed your earnings, you might have a challenge.
Financial Performance Records
Lastly, you need to be able to back up everything you say about your company's finances with a solid performance record. From bank statements to earnings statements, the SBA has a right to comb through all of this documentation to ensure your company's financial standing is the same as what you claim it to be. It's often best to have a professional assist you with the step.
Apply these tips to improve your chance of a successful application and certification as an SBA 8a business.