With all the 8(a) social disadvantage updates of late, the other 8(a) Business Development Program eligibility requirements haven’t been in the spotlight much. But when SBA released its last social disadvantage FAQ (Part II), it also released a new potential for success FAQ with some helpful guidance.
General 8(a) Eligibility
To be eligible for SBA’s 8(a) Business Development Program, there are several eligibility criteria an applicant must meet—and a participant must maintain compliance with. SBA’s general eligibility criteria are found in Part 124, Subpart A, of SBA’s 8(a) regulations, specifically at 13 C.F.R. § 124.101, which states:
Generally, a concern meets the basic requirements for admission to the 8(a) BD program if it is a small business which is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States, and which demonstrates potential for success.
So, as a quick reminder, the eligibility criteria can generally be broken down as follows:
- Company must qualify as a small business;
- Company must have unconditional ownership by a disadvantaged individual (DI);
- Company must be controlled by a disadvantaged individual;
- DI must be socially disadvantaged;
- DI must be economically disadvantaged;
- DI must have good character;
- DI must be United States Citizen, residing in the United States; and
- Company must demonstrate potential for success.
Current Potential for Success Rule
As relevant to the subject FAQ, SBA’s potential for success rule, found at 13 C.F.R. § 124.107, generally states the following:
SBA must determine that with contract, financial, technical, and management support from the 8(a) BD program, from contractors or from others assisting with business operations, the applicant concern is able to perform 8(a) contracts and possess reasonable prospects for success in competing in the private sector. To do so, the applicant concern must show that it has operated and received contracts (either in the private sector, at the state or local government level, or with the Federal Government) in its primary industry classification for at least two full years immediately prior to the date of its 8(a) BD application, unless a waiver for this requirement is granted pursuant to paragraph (b) of this section.
For a deeper dive into the existing SBA regulation for potential for success, please take a look at this prior blog on the subject.
Potential for Success FAQ
SBA’s most recent FAQ on the potential for success rule was issued on September 10, 2026. It covers exactly what an applicant must provide to SBA to demonstrate its potential for success, as well as what to do if the applicant doesn’t meet the standard requirements.
Specifically, the FAQ states the following:
What must I provide to demonstrate my business meets the Potential for Success requirement for entry into the 8(a) Business Development Program? You must provide the following:
- Business income tax returns for each of the last two tax years that show operating revenues; AND
- Proof of contract performance in the applicant’s primary NAICS code for the two full years immediately prior to application date, without gaps in performance.
It goes on to list five conditions that must be met for SBA to waive this “two years in business requirement” if it cannot be met. It states:
- The individual or individuals upon whom eligibility is based have substantial business management experience;
- The applicant has demonstrated technical experience to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD program;
- The applicant has adequate capital to sustain operations and carry out business plan as a Participant;
- The applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its primary industry category; and
- The applicant has or can demonstrate ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform contracts as a Participant.
Finally, the FAQ explains SBA will deny any 8(a) application that fails to meet both the “two years in business” criteria and the five waiver criteria. It adds that an applicant can simply reapply for admission in 90 days if it later becomes compliant with either or both sets of criteria to demonstrate potential for success. But it also stresses SBA’s recommendation to “wait to apply for entry into the 8(a) Business Development Program until your business meets these minimum requirements to maximize your potential for success in the program.”
Interestingly, this “new” FAQ largely parrots SBA’s existing potential for success regulations. In fact, the five conditions that must be met for a waiver of the “two years in business” rule appear to be identical to SBA’s waiver criteria listed at 13 C.F.R. § 124.107(b)(1).
So, the main things this FAQ appears to tell us—that are not also found in SBA’s regulations—are simply: (1) what SBA’s rules mean by requiring proof of contract performance and operating revenues under the primary NAICS code “for at least two full years” prior to the application date; and (2) SBA’s recommendations on when to reapply if denied on the basis of potential for success.
Indeed, the FAQ simply clarifies that the applicant’s documentation showing compliance with the “two years in business” rule must also show that contract performance must have been continuous or “without gaps in performance” for those two “full” years to meet SBA’s standards. And the FAQ simply confirms that SBA recommends you wait until you can show compliance with the minimum requirements before reapplying—despite the 90-day-reapplication window.
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