Women- and minority-owned business certification options

Diverse small business owners play a vital role in driving economic growth, yet many continue to face challenges accessing capital and resources. Obtaining certifications can help improve access to new funding opportunities, contracts and valuable networking. It also gives access to public and private programs designed to grow and sustain small businesses.

Below are some of the benefits of certification as well as the various options available to small business owners.

Note that the information in this article is derived from other sources and is intended to provide general educational information about each source’s individual requirements. The services described are not provided by Bank of America Corporation or any of its affiliates. Bank of America and its affiliates do not provide legal, tax or accounting advice. You should consult the sources directly and your legal and/or tax advisors before making any financial decisions.

Benefits of certification for small business owners

Getting certified brings new opportunities from federal agencies, state and local governments, and certain large corporations, which typically designate a percentage of contracts for certified small businesses. With certification often comes exclusive networking, training and educational programs for business owners. Certification may also make you eligible for loans, grants and programs specifically designated for certified entrepreneurs (like management and technical assistance programs). All in all, it can be a big win for many businesses.

What businesses are best suited for certification?

Pursuing certification can be a valuable tool for businesses looking to differentiate themselves in the marketplace. While any type of business can be certified, some industries may be more likely to benefit from certification than others. For example, industries that have a significant amount of government contracts or that rely on supplier diversity initiatives may be more likely to benefit from certification. Ultimately, the decision to seek certification depends on various factors, including industry, size and scope, and a business’ goals for growth and expansion.

What are the options for certification?

Certifications are available for small businesses owned by minorities, women, veterans and LGBTQI+ people, as well as economically disadvantaged small business owners and businesses that operate and hire in underutilized business zones or meet certain environmental standards.

Here’s an overview of different types of business certifications and how to begin the application process if you’re eligible.

8(a) small business certification

The Small Business Administration (SBA) offers the 8(a) business certification, which was designed to help create opportunities for small businesses whose owners are socially or economically disadvantaged. The federal government awards at least 5% of contracting dollars for 8(a) businesses and allows them to compete for set aside and sole source contracts.

To be eligible, businesses must meet several criteria, including — but not limited to — being majority owned (at least 51%) and controlled by individuals who are economically and socially disadvantaged.

For more information on eligibility and how to apply, visit sba.gov/8(a).

HUBZone business certification

The Historically Underutilized Business Zone (HUBZone) is a program with the goal of growing businesses in historically underutilized areas by awarding them at least 3% of federal contract dollars each year.

To qualify for the HUBZone certification program, your small business must have its principal office located in a HUBZone; have at least 35% of its employees living in a HUBZone; and be at least 51% owned and controlled by U.S. citizens, a community development corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization or a Native American tribe.

You can apply for your HUBZone business certification on the SBA’s website. While there is no limitation to the length of how long a business can have a HUBZone certification, it will have to recertify for the program once a year. Additionally, an examination of your business will be required every three years.

You can find the full qualification criteria in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR).

Minority business enterprise

One of the largest and most widely recognized diversity certifications is the certification for minority business enterprises (MBEs) issued by the National Minority Supplier Development Council (NMSDC).

To qualify as an MBE, businesses must be at least 51% owned by members of minority groups as defined by the NMSDC as Asian-Indian, Asian-Pacific, Black, Hispanic or Native American.

For more information on eligibility and how to apply, visit nmsdc.org/mbes.

Women’s business enterprise

If your business is majority-owned and operated by one or more women, you may be eligible for the SBA’s Women-Owned Small Business program (WOSB) and Economically Disadvantaged Women-Owned Small Business (EDWOSB) certification.

To be eligible for the WOSB Federal Contract program, a business must:

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

To qualify as an EDWOSB within the program, a business must:

• Meet all the requirements of the WOSB Federal Contract program
• Be owned and controlled by one or more women, each with a personal net worth (excluding primary residence and ownership interest in the business) of less than $850,000
• Be owned and controlled by one or more women, each with an average of $400,000 or less in adjusted gross income over the previous three years
• Be owned and controlled by one or more women, each with $6.5 million or less in personal assets (including primary residence and ownership interest in the business)

For more information on eligibility and how to apply, visit wosb.certify.sba.gov/.

Another certification option for women-owned businesses is through the Women’s Business Enterprise National Council (WBENC), which provides the most widely recognized certification for women-owned businesses in the U.S. The Women’s Business Enterprise network includes more than 19,000 women-owned businesses, more than 550 corporate members and 14 regional partner organizations. With certification, businesses receive professional development, networking and education opportunities among other benefits.

To qualify as a WBENC-Certified Women’s Business Enterprise your business needs to be at least 51% owned, controlled, operated and managed by women.

For more information on eligibility and how to apply, visit wbenc.org/certification/.

Veteran-owned business certification

For veterans of the U.S. Armed Forces, two different certifications are available through VetCert, a federal government program that grants certification for veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs). With these certifications, you’re granted opportunities to compete for certain contracts that are set aside for veterans and veterans who became disabled during active service.

To qualify for these certifications, a small business must be at least 51% owned and controlled by one or more veterans. To apply for SDVOSB certification, the owner also must have a service-connected disability.

For more information on eligibility and how to apply, visit sba.gov.

For business certification in the private sector, the National Veteran-Owned Business Association’s Certified Veteran’s Business Enterprise (VBE) program offers certifications as a marketing tool for businesses that want to work with VBEs. Your small business must be at least 51% owned by one or more U.S. military veterans to qualify. The organization offers a separate certification for the Service-Disabled Veteran’s Business Enterprise program.

For more information on eligibility and how to apply, visit navoba.org/.

LGBTQI+ business certification

The National LGBT Chamber of Commerce created a certification program to help entrepreneurs in the LGBTQI+ community have greater access to contracting opportunities. The Certified LGBT Business Enterprise (LGBTBE) credential gives businesses an opportunity to network and mentor with other LGBTBEs, provides access to scholarships, and affords businesses special discounts from allied partners.

To apply, your small business must be 51% owned, operated, managed and controlled by a person or persons who identify as part of the LGBTQ community, operating in the U.S., and independent from any non-LGBTQ business enterprises. You also may owe a certification fee (waived if you’re a member of a local affiliate chamber) and are subject to a site visit evaluation. The certification lasts three years once it is granted.

For more information on eligibility and how to apply, visit nglcc.org/lgbtbe-certification/.

Leadership in Energy and Environmental Design (LEED) certification

Businesses looking for a path to sustainability can pursue LEED certification for their buildings. According to the U.S. Green Building Council (USGBC), the goal of LEED is to reduce the environmental impact of buildings and develop sustainable cycles for healthier communities. LEED offers certification for building design and construction, interior design and construction, building operations and maintenance, neighborhood development, homes, and cities.

LEED certification is granted on a project basis rather than by business. Each submitted project earns points by meeting standards in categories such as energy, water, transportation, waste and indoor environmental quality. The project then goes through a verification and review process, after which it receives one of four LEED certification levels: Certified (40-49 points), Silver (50-59 points), Gold (60-79 points) or Platinum (80+ points). Specific policies, procedures and pricing for each LEED certification can be found on the USGBC website.

For more information on getting LEED certification for a project, visit usgbc.org/leed.

Things to keep in mind when considering certification

Application process

Each entity that certifies businesses will operate a little differently, so eligibility, processes, requirements and guidelines will vary. What’s required will also depend on what kind of entity your business is and where you’re applying, such as a local or state government.

The standard throughout is the need for major documentation, so prepare yourself for some paperwork — including, but not limited to, your tax returns, profit and loss statement and balance sheet — and submit your application (typically online). For the SBA, you’ll also need to show an active registration in the System for Award Management for the business, available at SAM.gov.

After you’ve submitted your application and supporting documents, certification can take up to 90 days to be completed.

Application fees

While the SBA’s online certification processes are free, most certifying organizations base their application fees on your company’s revenue and region. These fees can typically range from around $250-$2,000.

State and local government certifications

Local and state governments also offer certification programs. Check with your city and state government agencies that work with businesses (such as its economic development agency) for information on how to apply.

Identifying opportunities as a certified business

Once you’re certified, you’ll want to take advantage of the new opportunities that may now be available to you. Work it! Start hunting on city, state and company websites for opportunities to bid on work. Some offer free e-newsletters advertising new projects.

What should be done after certification?

You have bragging rights, so make sure you mention your new certification on your website, social media, marketing materials and in your email signature. Send out a press release announcing your achievement to your industry association’s newsletters. If you have your own external newsletter, be sure to include it there.

Keep in mind, too, that your work is not finished once certified. You’ll need to maintain your status, with some organizations requiring recertification as often as every year. Stay on top of what you need to do to stay compliant, so you’re always ready to jump on new opportunities.