Economic Disadvantage
Compliance & LegalDefinition
A condition where an individual's ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities.
More Information
Economic disadvantage is determined by personal net worth, access to credit, income levels, and asset ownership compared to similarly positioned non-disadvantaged individuals. It is a key eligibility requirement for 8(a), DBE, and EDWOSB programs. Documentation may include tax returns, financial statements, and credit history.
Example
An applicant demonstrates economic disadvantage by showing limited access to business financing despite a strong credit score.