If you want to participate in SBA's socio-economic programs, your small business can't be a side gig. SBA regulations require that to be eligible for the 8(a) Business Development Program, a business’s manager must work full time for the business. In this case, the applicant’s CEO had a full-time job with another employer. The applicant essentially tried to argue that its CEO had time and flexibility to work both jobs, but that argument didn’t fly.
In the Matter of iHealth Innovative Solutions, LLC, SBA No. BDPE-600
Background
IHealth Innovative Solutions applied for admission into the 8(a) Business Development Program. The SBA denied the application, because it appeared iHealth’s CEO worked full time for another company. Under the SBA’s rules, to eligible for the 8(a) progran, a disadvantaged person must manage the firm on a full-time basis. iHealth appealed the denial to the Office of Hearings and Appeals
Legal Analysis
OHA affirmed the SBA’s denial. Under 13 C.F.R. §124.106(a)(3) a disadvantaged individual who manages an 8(a) applicant must devote full time to the business under normal business hours. Here IHealth’s CEO worked as a project manager for another company. iHealth argued that that the principal’s other job was remote and it allowed it him a flexible schedule. But OHA found that it was unclear how much time the CEO devoted to each job. iHealth had provided little evidence, other than conclusory statements, to establish how much time was devoted to each job.
IHealth is represented by its Presdient and CEO, Deon Norals. The goverment is represented by Mark R. Hagedorn of the Small Business Administration.