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New Requirements For Small Businesses After Affirmative Action Ruling

Audio version available here:

Length: approx. 1 min. 30 sec.


Small business owners participating in the SBA’s program for “socially and economically disadvantaged” businesses should pay close attention to this article. Following the Supreme Court’s ruling on affirmative action in universities, its effects are now being felt in the business sphere. Specifically, for those who benefit from the 8(a) Business Development Program.


The 8(a) program was developed for “Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans” to receive support contracts from the federal government. Before the affirmative action ruling, applications for the 8(a) program included race-based questions as qualifiers. To comply with the ruling, the application has since been updated with new questions so applicants can describe in detail exactly how they are at a social disadvantage. Alternatively, applicants can submit a “social disadvantage narrative” that allows them to freely respond with instances of bias that make their business ventures more difficult than non-disadvantaged Americans.


With the new application requirements, processing and approval times can take longer than the typical 60-90 day period. Additionally, business owners seeking to apply for the program should also keep in mind that proof of economic disadvantages will need to be provided through “personal net worth, adjusted gross income and assets”.


Litigation surrounding the 8(a) program is still ongoing, and new rulings could take place that change the application process once more. To stay updated, make sure to follow XQ CPA for the latest business news. If you are personally affected by this program change and need the right guidance to stay in compliance, reach out and make an appointment with our experienced financial advisors. We are here to help small business owners like you.


Phone: 832-295-3353



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