DEFINITION of '8(a) Firm'
A special status given to a firm that is owned and operated by persons deemed to be socially or economically disadvantaged. A business considered an 8(a) Firm is eligible to receive financial assistance, training, mentoring and other forms of assistance. The status is part of a business development program administered by the Small Business Administration (SBA), a United States agency charged with supporting the growth and development of small businesses. It is specifically outlined in Section 8(a) of the Small Business Act, and is designed to help small, disadvantaged businesses compete in the general market.
BREAKING DOWN '8(a) Firm'
In order to increase business involvement by a broader portion of society, governments provide incentives for certain segments of the population to own a business. The SBA identifies several groups that are eligible for 8(a) status including: Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans. Businesses that receive contracts due to their 8(a) status are subject to annual reviews.