Mentor-Protege Program will be open for all small business

Prior to the Small Business Administration's ruling on July 25th, the Mentor-Protege Program was only open to those businesses that were certified as an 8(a) company. While the Program will remain separate for 8(a) companies, the program itself will be almost identical.

The Program is designed to assist the Protege with developing their business. Protege's must submit a business plan which is approved by the SBA. This business plan then becomes the goals that the Mentor will assist in achieving. Not every relationship is the same, they are built on the needs and the strengths of the companies involved.

So as a Protege what type of mentors can you expect? A Mentor can be a company of any size but must be a for-profit entity. The only other requirement is that the Mentor must be able to demonstrate that it can fulfill all obligations needed by the Protege.

On the flip side, how do you become a Protege? You must qualify as a small business, which is determined by the size standard of the primary NAICS code. The SBA is also allowing for companies to submit an application to the program under their secondary NAICS if that is the business that the company is attempting to develop.

The new ruling will officially take effect August 24th and is rumored that the SBA will begin accepting applications to the program October 1st.

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Does your firm qualify for 8(a) status and the sole sourcing that comes along with it?

If you are a small business you have heard of contractors receiving a sole source because they are 8(a) certified. What does this mean and how do you get one?

First, you have to go through the grueling 8(a) certification process, which seems like you are allowing the Small Business Administration access to your life. If you make it to the end of the process with a certification than you are very lucky, these days SBA has been cracking down on requirements. So what exactly does is mean and what is this sole source?

A sole source contract means that the agency that is purchasing does not have to put that service and/or product out for bid. Right now this can only be done for firms that hold the 8(a) status, soon to be woman owned small businesses as well. The reasoning behind it comes from what it means to be an 8(a) firm.

To qualify to submit an application for the certification you need to meet the following:

·         Business must be majority-owned by an individual(s) (aka no holding companies)

·         That individual(s) must be an American citizen

·         Business must be majority-owned and controlled/managed by socially and economically disadvantaged individual (s)

o   In order to qualify as socially disadvantaged you need to belong to one of the following:

§  Black American

§  Hispanic American

§  Native American

§  Asian Pacific American

§  Subcontinent Asian American

o   In order to qualify as economically disadvantaged the individual(s) your net worth must be below $250,000

§  That does not include the value of the primary home, business or any retirement funds

·         Business must be considered a small business

·         Business must demonstrate potential for success

·         Principals must show good character

These are just the initial requirements, if you want to find out more information and if your firm qualifies take a look at the SBA’s 8(a) Certification Q&A: https://www.sba.gov/blogs/sbas-8a-certification-program-explained