[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR124.302]



[Page 381-382]

 

                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. 124.302  What is early graduation?



    (a) General. SBA may graduate a firm from the 8(a) BD program prior 

to the expiration of its Program Term where SBA determines that:

    (1) The concern has successfully completed the 8(a) BD program by 

substantially achieving the targets, objectives, and goals set forth in 

its business plan prior to the expiration of its program term, and has 

demonstrated the ability to compete in the marketplace without 

assistance under the 8(a) BD program; or

    (2) One or more of the disadvantaged owners upon whom the 

Participant's



[[Page 382]]



eligibility is based are no longer economically disadvantaged.

    (b) Criteria for determining whether a Participant has met its goals 

and objectives. In determining whether a Participant has substantially 

achieved the targets, objectives and goals of its business plan and in 

assessing the overall competitive strength and viability of a 

Participant, SBA considers the totality of circumstances, including the 

following factors:

    (1) Degree of sustained profitability;

    (2) Sales trends, including improved ratio of non-8(a) sales to 8(a) 

sales since program entry;

    (3) Business net worth, financial ratios, working capital, 

capitalization, and access to credit and capital;

    (4) Current ability to obtain bonding;

    (5) A comparison of the Participant's business and financial 

profiles with profiles of non-8(a) BD businesses having the same primary 

four-digit SIC code as the Participant;

    (6) Strength of management experience, capability, and expertise; 

and

    (7) Ability to operate successfully without 8(a) contracts.

    (c) Excessive withdrawals. SBA may graduate a Participant prior to 

the expiration of its program term where excessive funds or other assets 

have been withdrawn from the Participant (see Sec. 124.112(d)(3)), 

causing SBA to determine that the Participant has demonstrated the 

ability to compete in the marketplace without assistance under the 8(a) 

BD program.

    (d) Benchmark achievement. SBA may graduate a Participant prior to 

the expiration of its program term where the Participant has 

substantially achieved the targets, objectives and goals of its business 

plan as adjusted under Sec. 124.403(d) and its primary industry 

classification falls within a SIC Major Group in which the benchmarks 

described in Sec. 124.403(d) have been achieved.



[63 FR 35739, 35772, June 30, 1998]