SBA’s 8(a) Program Problems

The Small Business Administration’s 8(a) program is intended to give a leg up to small businesses that have at least a 51%-ownership by individuals who are socially and economically disadvantaged. “Businesses that participate in the program receive training and technical assistance designed to strengthen their ability to compete effectively in the American economy.” In July, a federal district court said the program’s rebuttable presumption that individuals in certain racial groups are socially disadvantaged violates the U.S. Constitution’s guarantee of equal protection and enjoined the SBA from using this rebuttable presumption. In response, the SBA issued interim guidance allowing all 8(a) applicants to submit a social disadvantage narrative and published a guide on how to write it. #IdeaoftheDay