Newsflash: 8(a) Income and Net Worth Eligibility Standards Increased

As of July 15, the initial caps on net worth, adjusted gross income, and fair market value of assets for the 8(a) program have gone up. The dollar amounts for initial 8(a) economic disadvantage eligibility have increased quite a bit, making more people economically eligible. Read on for the details on this change.

We wrote about this revision in a couple of posts (here and here). But the rule is now official, and the 8(a) program should be open to many more applicants under the new rules.

The rules now state:

  • “The net worth of an individual claiming disadvantage must be less than $750,000.” (increased from $250,000, making initial and continuing eligibility the same number)
  • “SBA will presume that an individual is not economically disadvantaged if his or her adjusted gross income averaged over the three preceding years exceeds $350,000.” (increased from $250,000, making initial and continuing eligibility the same number)
  • “An individual will generally not be considered economically disadvantaged if the fair market value of all his or her assets (including his or her primary residence and the value of the applicant/Participant firm) exceeds $6 million.” (increased from $4 million, making initial and continuing eligibility the same number)

In addition, to address an issue older applicants were facing (as we raised on the blog), “retirement accounts will now be excluded from calculations of an economically disadvantaged individual’s net worth, irrespective of the individual’s age.”

This change should make it a little easier to qualify for the 8(a) program, so kudos to the SBA for making this change.

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