Since the start of the Covid-19 pandemic, business owners across the country have become increasingly aware of all that the Small Business Administration (SBA) has to offer. You are probably most familiar with PPP loans and EIDL loans, which have been widely discussed and used during the pandemic.
While these loans were important, I also encourage you to familiarize yourself with the SBA’s flagship programs, the 7(a) and the 504. In addition to that, here are a few other SBA programs you could take advantage of. Here are a few that I find most useful:
1. Disadvantaged Small Business Program
Small businesses that are at least 51% owned and operated by socially and economically disadvantaged people are eligible to receive approximately $50 billion in federal contract dollars each year.
Socially disadvantaged people, according to the SBA, “are those who have experienced racial or ethnic prejudice or cultural bias within American society because of their identity as members of groups and without regard to their individual qualities. The social disadvantage must arise from circumstances beyond their control.” There is no set definition for what the government considers “economically disadvantaged”, but they have you Fill out forms to describe your economic situation.
2. Veteran Assistance Programs
Like the Disadvantaged Small Business Program discussed above, the Veterans Assistance Program allocates a specific amount of federal contract dollars to 51% or more veteran-owned businesses, but also allows them to purchase surplus government assets. The property must be used for the “normal conduct” of business activities and not for personal use.
There is also a Disabled Veteran-Owned Small Business Program under which the government allocates approximately 3% of federal contract dollars each year. This program specifies that the veteran’s disability must be service-related. In addition, the veteran with a disability must be involved in long-term decision-making and the management of day-to-day operations.
3. Federal Women-Owned Small Business Contracting Program
Roughly 5 percent of all federal contract dollars go to women-owned small businesses every year. Additionally, there are other contracts available in sectors where women-owned businesses are considered underrepresented. For businesses owned by economically disadvantaged women, there are even more contracts specifically for them.
As with other programs, 51% must be owned and operated by female US citizens, managing day-to-day operations and making long-term decisions. The government specifies for women-owned businesses what makes them economically disadvantaged. The woman(s) who own or control 51% or more of the business must each:
- Personal net worth below $750,000
- $350,000 or less in average adjusted gross income over the previous three years
- $6 million or less in personal assets
It’s important for small business owners to understand that while much of the pandemic relief has ended, there are other options for you. To learn more about eligibility and application requirements, you can visit the SBA website or visit a small business development center in your area. It should also be noted that you can compete for multiple contract awards under all socio-economic programs for which you are eligible.