Benefits And Drawbacks Of Government Involvement In Your Small Business: The SBA 8A Application
There is a lot of money available to back your small business if you want it. The government provides small business startup loans as well as ongoing support and development programs for small businesses. However, you may find that the restrictions and requirements of these programs are a lot, and it may just be too much to keep track of when you are trying to operate as you like. Here are some benefits and drawbacks of government involvement in your small business, particularly where the SBA 8a application is concerned:
Drawbacks
You Have to Follow Government Rules
If you want government funds, support, guidance, mentorship, etc., you have to play by the government rules. This may include things like applying for certification for the 8a status before you can apply for the 8a funds application -- the process can seem rather confusing. On top of that, you have to keep your 8a certified status current for nine years, and you have to carry that status for four years before you can apply for funds to help you develop your business. It is a struggle sometimes to keep up and comply with the unusual rules.
Failure to Comply with All Rules Results in Loss of Support
You may almost feel like you are breaking the law when you accidentally fail to follow a rule and the government support is pulled. You have to comply with all the rules, no questions, or you will lose the funds and the support for your business. Meanwhile, government officials can dictate certain terms of operation, and you have to follow those as well. It can be very stressful.
Benefits
Government Contracts Are HUGE
It goes without saying that government contracts are huge. Anyone that can even get in on the ground floor for a government contract is going to make a lot of money. That is the draw of government funding, and the biggest benefit of filing an 8a application. Unfortunately, if you are not the type of business the government can use for a contract, you will not be eligible for this program anyway. You have to be in manufacturing, construction, industrial production, etc. to even qualify. If your business does fit that particular criteria then you can apply, but you will still need to meet all of the other requirements as well.
When Competitors Are Going Bankrupt, Your Company Will Not
Another big benefit of getting the government involved and getting them to back your business is that bankruptcy is nearly impossible. The government is supplying your business with profits, operational funds, mentoring and business advice, and guidance when things get difficult. When your competitors are filing for bankruptcy and going out of business, your business will remain afloat.