SBA Answers Questions on 8(a) Program Extension

For those who didn’t see it, SBA recently put out guidance on how the 8(a) program term extension will work. The guidance provides some nice examples of how the process will play out.

The guidance has some straight forward scenarios for how SBA will process the 8(a) term extension. Remember, there is still time until March 15 to provide comments on SBA’s 8(a) term extension rule. Here are some of the highlights.

Who is Eligible?

  • Firms that were in the 8(a) Program between March 13, 2020, and September 9, 2020 can get an extension.
  • Firms that terminated, early graduated, or voluntarily withdrew are not eligible.
  • Firms admitted on or after September 10, 2020 are ineligible.
  • Active 8(a) firms participating on January 13, 2021 will receive an automatic one-year program extension unless they decline in writing.

Firms with COVID-19 Suspension

  • An 8(a) participant that voluntarily suspended its program participation related to COVID-19 will have the length of the suspension will first added to the firm’s program term, “and the one-year extension will be added to the end of that extension.”

Graduated Firms

  • Firms that were participating in the 8(a) Program as of March 13, 2020, but graduated before January 13, 2021, are eligible for program readmittance.
  • Firms must notify SBA to be readmitted by March 15, 2021 and must certify that they meet all program eligibility requirement.
  • If readmitted, the extension date is the firm’s original program exit date. For example, a firm with a program completion date of April 15, 2020 is readmitted January 25, 2021, their new program end date is April 15, 2021.
  • Note that the “new program completion date is one year from the date it initially completed the program, not the date the final rule was published.”

This is welcome guidance from SBA on the 8(a) term extension. Be sure to read through the guidance as it pertains to your company’s specific situation.

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