[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR124.111]

[Page 358-359]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 124--8(A) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS DETERMINATIONS--Table of Contents
 
                  Subpart A--8(a) Business Development
 
Sec. 124.111  Do Community Development Corporations (CDCs) have any special rules for applying to the 8(a) BD program?

    (a) Concerns owned at least 51 percent by CDCs (or a wholly owned 
business entity of a CDC) are eligible for participation in the 8(a) BD 
program and other federal programs requiring SBA to determine social and 
economic disadvantage as a condition of eligibility. These concerns must 
meet all eligibility criteria set forth in Sec. 124.101 through 
Sec. 124.108 and Sec. 124.112 to the extent that they are not 
inconsistent with this section.
    (b) A concern that is at least 51 percent owned by a CDC (or a 
wholly owned business entity of a CDC) is considered to be controlled by 
such CDC and eligible for participation in the 8(a) BD program, provided 
it meets all eligibility criteria set forth or referred to in this 
section and its management and daily business operations are conducted 
by one or more individuals determined to have managerial experience of 
an extent and complexity needed to run the concern.
    (c) A concern that is at least 51 percent owned by a CDC (or a 
wholly

[[Page 359]]

owned business entity of a CDC) must qualify as a small business concern 
as defined in part 121 of this title. The size standard corresponding to 
the primary industry classification of the applicant concern applies for 
determining size. SBA will determine the concern's size independently, 
without regard to its affiliation with the CDC or any other business 
enterprise owned by the CDC, unless the Administrator determines that 
one or more such concerns owned by the CDC have obtained, or are likely 
to obtain, a substantial unfair competitive advantage within an industry 
category.
    (d) A CDC cannot own 51% or more of another firm which, either at 
the time of application or within the previous two years, has been 
operating in the 8(a) program under the same primary SIC code as the 
applicant. A CDC may, however, own a Participant or an applicant that 
conducts or will conduct secondary business in the 8(a) BD program under 
the same SIC code that a current Participant owned by the CDC operates 
in the 8(a) BD program as its primary SIC code.
    (e) SBA does not deem an individual involved in the management or 
daily business operations of a CDC-owned concern to have used his or her 
individual eligibility within the meaning of Sec. 124.108(b).
    (f)(1) A CDC-owned applicant concern must be in business for at 
least two years, as evidenced by income tax returns for each of the two 
previous tax years showing operating revenues in the primary industry in 
which the applicant is seeking 8(a) BD certification, or demonstrate 
potential for success as set forth in paragraph (e)(2) of this section.
    (2) In determining whether a CDC-owned concern has the potential for 
success, SBA will look at a number of factors including, but not limited 
to:
    (i) The technical and managerial experience and competence of the 
individual(s) who will manage and control the daily operation of the 
concern;
    (ii) The financial capacity of the concern; and
    (iii) The concern's record of performance on any previous Federal or 
private sector contracts in the primary industry in which the concern is 
seeking 8(a) certification.
    (g) A CDC-owned applicant and all of its principals must have good 
character as set forth in Sec. 124.108(a).