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Small Business Program - Frequently Asked Questions

What is a Small Business?

Small business size standards, established by the U.S. Small Business Administration (SBA), define the maximum size that a company (along with its affiliates) can be to qualify as a small business. These standards are used to help determine whether your business is eligible for SBA’s small business programs, including financial assistance.


What is an Emerging Small Business?

It is a small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the Standard Industrial Classification code assigned to a contracting opportunity.


What is a Size Standard?

Whether you are a sole proprietor, LLC, partnership or corporation, the SBA defines a business as small mostly based on either the number of employees over the past 12 months or the average annual receipts over the past three years.

The two most widely used standards to qualify a business as small are 500 employees for most manufacturing and mining industries and $7.5 million in average annual receipts for many nonmanufacturing industries. There are many exceptions to these standards because size standards vary by industry.


What are Set Asides?

Under the Small Business Act, federal agencies conduct a variety of procurements that are reserved exclusively for small business participation. These transactions are called "small business set-asides" and include the Small Business Reserve, Set-Asides above the simplified acquisition threshold, the Small Business Competitiveness Demonstration Program, the HUBZone Empowerment Contracting Program, and the Service Disabled Veteran Owned Small Business Program.


What is a Small Business Innovative Research (SBIR) Contract?

It is a type of contract designed to foster technological innovation by small businesses with 500 or fewer employees. The SBIR contract program provides for a three-phased approach to research and development projects: technological feasibility and concept development; the primary research effort; and the conversion of the technology to a commercial application.


What is a Small Disadvantaged Business Concern?

Since October 2008, small businesses can self-represent their status as a small disadvantaged business (SDB).  A small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.


What is a Service Disabled Veteran Owned Small Business?

It is a business which qualifies as a small business and is 51 percent unconditionally owned and controlled by one or more person(s) who served in the Active Military, Naval, or Air Service, and who was discharged or released under conditions other than dishonorable, and whose disability was incurred or aggravated in line of duty in the active military, Naval, or Air Service, or in the case of permanent or severe disability, the spouse or permanent care giver of such veteran.  For more information:


What is the HUB-Zone Business Program?

The program encourages economic development in historically underutilized business zones - "HUBZones" - through the establishment of preferences.  Firms must be certified by the SBA in order to participate.  For more information:


What is a HUBZone Business?

To be certified as a HUBZone Business, the firm must be a small business and it must be located in a "historically underutilized business zone" or HUBZone.  It must be owned and controlled by 51 percent of U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe, and at least 35 percent of its employees must reside in a HUBZone.


What is 8(a)?

The SBA's 8(a) Program, named for a section of the Small Business Act, is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market.  To participate in the 8(a) Program, a firm must be certified by the SBA.

For more information:


What is an 8 (a) Business?

To participate in the 8(a) Program, a firm must be certified by the SBA.  To qualify, the firm
must be a small business, must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and must demonstrate potential for success.


What is a Certified 8(a) Firm?

It is a firm owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the SBA’s 8(a) Business Development Program.


Does the government offer certifications?

The SBA handles two certifications for federal government procurement programs:

  • 8(a) Business Development
  • HUBZone


Businesses can self-certify that they are any of the following:

  • Small business
  • Small disadvantaged business
  • Women-owned business
  • Veteran-owned business
  • Service-disabled veteran-owned business



Bernadine B. Stewart

Small Business Specialist

Office of Acquisition