SBA raises 8(a) and EDWOSB personal net worth cap to $850K (continuing eligibility $1.32M)
Citation: 13 CFR § 124.104(c)(2); 13 CFR § 127.203(c) Primary source ↗
Full explanation
The SBA's economic disadvantage caps for 8(a) Business Development and EDWOSB had been set at $750,000 personal net worth (with primary residence and applicant business equity excluded) since the program's modern restructuring in the early 2010s. After more than a decade without adjustment, the caps were increasingly out of step with inflation and small-business asset growth — qualifying owners who had built modest savings or owned modest secondary properties were aging out of the program.
The May 2023 rule (88 Fed. Reg. 18648) updated the caps:
- **Initial 8(a) and EDWOSB eligibility:**
- Personal net worth: $750K → **$850K** (excluding primary residence equity, applicant business equity, qualified retirement)
- Adjusted gross income (3-year average): $400K → unchanged
- Total assets: $6.5M → unchanged
- **Continuing 8(a) and EDWOSB eligibility:**
- Personal net worth: $750K → **$1,320,000**
- The continuing eligibility cap allows existing program participants to grow during their term without losing status.
The rule reflects the SBA's recognition that the program's intent — to support socially and economically disadvantaged firms during a development period — was being undermined when growing 8(a) firms hit the prior $750K cap mid-term and had to exit before completing their 9-year journey.
**HUBZone and SDVOSB are unaffected.** Neither program has a personal net worth cap. WOSB (without the EDWOSB sub-tier) also has no personal net worth cap.
What this means for diverse contractors
**For new 8(a) and EDWOSB applicants:** You now have $100K more headroom on personal net worth at the time of application. If you were previously borderline at $750-$850K PNW, the program is now accessible.
**For existing 8(a) and EDWOSB participants:** Your continuing eligibility cap nearly doubled to $1.32M. The practical effect: you can grow personal wealth substantially during your 9-year term without triggering an economic-disadvantage review. Many growing 8(a) firms had been managing personal finances around the $750K cap; the new $1.32M cap removes most of that pressure.
**What's still excluded from personal net worth:** primary residence equity, equity in the applicant business itself, qualified retirement accounts (401(k), IRA, qualified pension). What's still included: investment accounts, second properties, vehicles above thresholds, life insurance cash value, equity in non-applicant businesses.
**Spousal assets:** still attributable to the applicant for purposes of the cap. The 2023 rule did not change the spousal-asset attribution framework.
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