Upcoming Certification Changes for Women-Owned Businesses

Female business owner

If you’re a woman small business owner who wants to do business with corporate or government clients, you know there’s a lot of competition. But you can get an edge by getting your company certified as a woman-owned business.

Certification makes your business more visible to potential clients, increases your networking opportunities, and can expose you to new possibilities. Whether you’ve never thought about getting certified, have considered it, or are already certified, you should know the Small Business Administration (SBA) has proposed to amend its certification process. New regulations are expected to be published this summer.

Here’s what you need to know

To refresh your memory, there are two types of woman-owned business certifications. The Women’s Business Enterprise (WBE) certification is for businesses wanting to do business with the private sector, nonprofits, state governments, or local governments.

For those wanting to work with the federal government, your goal is certification from Women-Owned Small Business (WOSB) or Economically Disadvantaged Women-Owned Small Business (EDWOSB).

To be eligible for the women’s contracting program, your business must:

  • Be a small business
  • Be at least 51% owned and controlled by women who are U.S. citizens
  • Have women manage day-to-day operations and also make long-term decisions

To qualify as an economically disadvantaged business within the women’s contracting program, your business must:

  • Meet all the requirements of the women’s contracting program
  • Be owned and controlled by one or more women, each with a personal net worth less than $750,000
  • Be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income averaged over the previous three years
  • Be owned and controlled by one or more women, each with $6 million or less in personal assets
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The eligibility requirements to qualify as a WOSB or an EDWOSB are fully defined in Title 13 Part 127 Subpart B of the Code of Federal Regulations (CFR). You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.

According to SBA, the new requirements currently are scheduled to be published on June 30, 2020, and take effect 30 days later.

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Per the Office of Advocacy, the proposed rule would:

  • Provide that the SBA will establish a free electronic application process for all firms seeking to be certified as WOSBs or EDWOSBs. In the pursuit of speed, efficiency, and ease of administrative burden, applicants would apply online through an electronic application process.
  • Allow participation from an expanded list of federal and state entities with existing certification programs and confirm the continued participation of approved third-party certifiers. SBA 8(m) program participants.
  • Require approved third-party certifiers to notify applicants of their fees and the option to use SBA’s free online certification process.
  • Eliminate the self-certification option for SBA 8(m) program participants.
  • Adopt a $750,000 net worth standard when assessing economic disadvantage for eligibility for both the 8(m) EDWOSB Program and the 8(a) Business Development Program.

Perhaps the biggest change to affect participation is the elimination of self-certification. Businesses will need to certify through an approved third-party entity or go through the SBA’s free online certification at certify.sba.gov.

Already certified? Here’s what to know

If you’re already certified through a third party or the SBA, you’ll need to get recertified: “Third-party certified firms must recertify three years after the date of their most recent recertification as a third-party certified firm.”

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