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Guide for Demonstrating Social Disadvantage
1. Purpose
To participate in the 8(a) Business Development Program (8(a) Program), a firm must be 51% owned and
controlled by socially and economically disadvantaged individuals. The owner or owner(s) who are claiming
social and economic disadvantage can demonstrate their individual social disadvantage through one of two
options: by writing a narrative or by completing the fillable questionnaire in Certify.sba.gov.
This guide will provide insight into what elements to include in demonstrating social disadvantage.
1a. Definition
The definition of social disadvantage means that an individual has been subjected to racial, ethnic, or cultural
bias within American society because of their identities as members of groups and without regard to their
individual qualities. See 13 CFR 124.103(c).
An individual only needs to establish social disadvantage once for the entirety of the program term.
1b. How SBA Determines Disadvantage
SBA must determine that the discrimination or bias experienced by an individual is chronic, substantial, and
has occurred within American society (not within another country). Additionally, the discrimination must have
negatively impacted your entry or advancement in the business world.
2. Key Elements of a Social Disadvantage Narrative
To demonstrate social disadvantage, business owner(s) should include the following elements:
a. An indication of which identity or identities is/are the basis of social disadvantage.
b. Descriptions of incidents in which bias or discrimination has occurred.
For business owner(s) who choose to write a narrative, generally a length of at least three pages is sufficient,
but it may be more or less.
Business owner(s) who choose to complete the questionnaire can input a maximum of 1,000 characters per
each fillable field. SBA can request additional information, if needed.
3. Indication of Identity
Clearly describing which identity or characteristics you possess which have been subject to discrimination
helps SBA understand your experience and eligibility for the 8(a) Program.
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Race, Religion, Ethnic Origin, Gender, Sexual Orientation, Identifiable Disability, Isolation from American
Society, and others are all categories of identities/characteristics which have formed the basis of successful
social disadvantage submissions. It is important to specify the identities/characteristics within the
category/categories which form the basis of your social disadvantage (e.g., Subcontinent Asian American
Woman are specific identities within the Race and Gender categories).
One identity/characteristic is sufficient to establish social disadvantage, although individuals with multiple
identities/characteristics may wish to specify more than one, as it is often difficult to determine which single
characteristic is subjected to discrimination.
4. Descriptions of Incidents
An individual should typically provide two incidents of bias to establish chronic and substantial social
disadvantage. One incident may be enough to establish social disadvantage if it is pervasive or recurring. SBA
recommends limiting yourself to two examples to avoid unnecessary delays during the review process.
Experience(s) should be related to education, employment, and business history (including current or
previously owned companies). Here are some broad types of experiences which may establish social
disadvantage. Examples are included later in the document.
•
•
•
Education – SBA considers factors such as: denial of equal access to institutions of higher education;
exclusion from social and professional association with students or teachers; denial of education
honors rightfully earned; and social patters or pressures which discouraged the individual from
pursuing a professional or business education.
Employment – SBA considers factors such as: unequal treatment in hiring; promotions and other
aspects of professional advancement; pay and fringe benefits; other terms and conditions of
employment; retaliatory or discriminatory behavior by an employer; and social patterns or pressures
which have channeled the individual into nonprofessional or non-business fields.
Business history – SBA considers factors such as: unequal access to credit or capital; acquisition of
credit or capital under commercially unfavorable circumstances; unequal treatment in opportunities
for government contracts or other work; unequal treatment by potential customers and business
associates; and exclusion from business or professional organizations.
For each incident, please describe who, what, where, why, when, and how discrimination or bias occurred.
Incidents are more readable if they provide information in the following order within a narrative:
•
When – Explain when the discriminatory conduct occurred. Exact dates, where available, are
preferred but are not necessary so long as the incident provides a specific time period. This
discrimination can be from any period of your life; you do not need to be experiencing current
discrimination to qualify.
•
Where – Explain where the discriminatory conduct occurred. The incident must have occurred in
American society.
•
Who – Explain who committed the discriminatory action. This could include an individual, a group of
individuals, or an institution. Individual names, where available, are preferred but not necessary so
long as the incident provides a specific figure or organization.
•
What – Explain the discriminatory conduct.
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•
Why – Explain the reason(s) that the conduct was more likely motivated by bias or discrimination than
other non-discriminatory reasons. Without additional facts, a mere assertion that the action was the
result of bias or discrimination will not be enough to support a claim of social disadvantage.
•
How – Explain how each instance of discriminatory conduct impacted your entry into or advancement
in the business world. Offensive comments or conduct, while reprehensible, will not support a claim
of social disadvantage if there is no negative impact associated with the incident.
4a. Examples of When
The following are examples that would satisfy
the level of detailed required by SBA:
The following are examples that would not
provide the level of detail required by SBA:
•
Example 1 (Education): Spring semester of
my second year in college
•
Example 1 (Education): In college
•
Example 2 (Employment): In my mid-20s
•
Example 2 (Employment): November 25,
2020
•
Example 3 (Business History): Within the first
few years of starting my business
•
Example 3 (Business History): Fall of 2012
4b. Examples of Where
The following are examples that would provide
the level of detailed required by SBA:
The following are examples that would not
provide the level of detail required by SBA:
•
•
Example 1 (Education): At college
•
Example 2 (Employment): My first job
•
Example 3 (Business History): The bank
Example 1 (Education): University of ABC in
[City. State]
•
Example 2 (Employment): ABC Corporation
in [City, State]
•
Example 3 (Business History): ABC Bank in
[City, State]
4c. Examples of Who
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The following are examples that would satisfy
the level of detailed required by SBA:
The following are examples that would not
provide the level of detail required by SBA:
•
•
Example 1 (Education): My professors
•
Example 2 (Employment): One of the
company executives
•
Example 3 (Business History): A bank
employee
Example 1 (Education): My faculty advisor,
(whose name I do not recall); and Dr. John
Doe, the Director the University of ABC
School of Health Sciences
•
Example 2 (Employment): Jane Smith, VP for
Human Resources, ABC Corporation
•
Example 3 (Business History): ABC Bank’s
Senior Loan Officer
4d. Examples of What
The following are examples that would satisfy
the level of detailed required by SBA:
The following are examples that would not
provide the level of detail required by SBA:
•
•
Example 1 (Education): My faculty advisor,
Dr. Doe, refused to approve my request to
change my major.
•
Example 2 (Employment): I applied for an
internal promotion opportunity and didn’t
get it.
•
Example 3 (Business History): The bank
denied my company’s business line of credit
application.
Example 1 (Education): After attending three
semesters in the nursing program, I decided
to pursue a degree in business. Under
university policies, selecting a new major
outside the School of Health Sciences would
have required approval from my faculty
advisor. My faculty advisor declined my
request to change my major from nursing to
business administration.
•
Example 2 (Employment): I had been
working for ABC Corporation for three years
when a site manager position became
available. I applied but my co-worker, Emily,
got the job.
•
Example 3 (Business History): I applied for a
$50k business line of credit with ABC Bank.
My application was tentatively approved so
the bank Senior Loan Officer asked me to
come in-person to sign the final application
documents. Without explanation, the
application was denied the following week
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based on concerns related to my company’s
ability to re-pay.
4e. Examples of Why
The following are examples that would satisfy
the level of detail required by SBA:
•
Example 1 (Education): I had completed the
necessary pre-requisite classes and was
otherwise eligible to declare a business
administration major. During a meeting with
my faculty advisor and Dr. Doe, Dr. Doe
explained that I would have more career
options as a woman in healthcare. I later
learned that several male nursing students
in my class were given approval to declare
majors outside the School of Health
Sciences. For these reasons, I believe my
request was denied based on gender bias.
•
Example 2 (Employment): I requested a
debrief with Jane because I had more
experience and a higher trade certification
than Emily. Jane stated that the company
needed someone who could inspect active
and/or dangerous jobsites. I reiterated, just
as I had during my interview, that I was
capable of performing all aspects of the site
manager role to include on-site inspections.
Emily does not have a physical disability like
I do. For these reasons, I believe Emily was
selected over me due to unfounded
stereotypes associated with my physical
disability.
•
Example 3 (Business History): The line of
credit was tentatively approved because my
business met the minimal revenue and
capital requirements for approval.
Additionally, I had an excellent credit score
of 790. Only after I met the loan officer in
person did concerns arise over my ability to
repay. A white former colleague, who started
a business after I did, applied for the same
The following are examples that would not
provide the level of detail required by SBA:
•
Example 1 (Education): My faculty advisor
declined my request because he agreed with
the Director that I would be better off
seeking employment in a predominantly
female profession.
•
Example 2 (Employment): It was clear that
they saw my physical disability as a
limitation and moved on to the next
candidate despite demonstrating that I
could perform the tasks required for the
position.
•
Example 3 (Business History): Plenty of other
white business owners were able to obtain
lines of credit from ABC Bank. Thus, the
bank and its employees must have
arbitrarily set higher standards for business
owners and borrowers of color
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line of credit with a lower credit score than I
had and was successful. For these reasons, I
believe my application was denied due to
bias toward my race.
4f. Examples of How
The following are examples that would satisfy
the level of detailed required by SBA:
The following are examples that would not
provide the level of detail required by SBA:
•
•
Example 1 (Education): The treatment
towards me was upsetting and I oftentimes
think of where I would be today had I not
experienced this form of bias.
•
Example 2 (Employment): Being passed over
for the promotion was demoralizing. It made
me question why I should continue to work
so hard if people would not be able to see
beyond my disability. For this reason, I did
not apply for several other promotion
opportunities in the company.
•
Example 3 (Business History): The line of
credit would have positioned my company
to compete for larger contracts.
•
•
Example 1 (Education): Because my business
major was not approved, I did not graduate
with the education and experience
necessary for an entry-level career in
marketing. I spent the next 5 years
completing my marketing degree as a parttime student, which delayed my entry into
the marketing field.
Example 2 (Employment): Had I received the
site manager promotion, I would have
earned an additional $20,000 a year. This
extra income would have allowed me to
accumulate capital faster and start my
business three years earlier than I did.
Example 3 (Business History): Because my
line of credit application was declined, I was
not able to purchase an additional truck to
increase our company’s capacity. As a result,
we bid on but lost a contract opportunity
with the municipal government for facilities
maintenance.
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