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SBA HUBZone Program: The Basics

Government funding solutions

By Dane Panes

June 1, 2022

The Small Business Administration is a large federal organization that creates programs to assist small businesses in the United States. Aside from affordable government funding solutions, they also offer programs that help small businesses effectively compete in the American economy. 

One of these programs is the SBA HUBZone Program. 

The government aims to award at least 3% of its government contracting budget to HUBZone businesses. That means firms within the HUBZone area have plenty of chances to receive government contracting opportunities to grow their business. 

In this article, we’ll cover the basics of the HUBZone Program, including what it is, how it works, who qualifies, and how to apply for the HUBZone Program.

What is the SBA HUBZone Program?

The HUBZone, or the Historically Underutilized Business Zones, is a program offered by the Small Business Administration (SBA) to help small businesses in the economically distressed community gain preferential access and compete for government contracts. The program’s main goal is to promote capital infusion and job growth in historically underutilized business zones (HUBZone) in the country. 

The Department of Housing and Urban Development has identified areas considered as HUBZones. To qualify for the federal program, the applying business must operate within the identified HUBZone areas. 

How Does the HubZone Program Work?

As mentioned, in order to participate in the HUBZone program, your business must be located in a HUBZone area. If your business meets the eligibility criteria set by the SBA for the HUBZone program, you can apply for certification. Once certified, your business can start sending offers for set-aside government contracts. 

In addition, eligible HUBZone businesses will also receive a 10% evaluation preference. That means, the HUBZone business bidding for the set-side government contract will be given preference as long as their asking price doesn’t go over 10% of the lowest bid offered by a non-HUBZone business. 

The HUBZone program received many criticisms about the allocation of funds and the overall shortcomings in granting the program to small businesses. In 2020, the SBA implemented changes in the HUBZone program. They focused on improving customer service, increasing program use, expanding the HUBZone areas, and shortening the decision process. 

Now, the HUBZone applicants can get certified in as quick as 60 days after submitting their application. The HUBZone map is also to be updated every five years, expanding to rural areas with high unemployment rates.

Important Note: To continue participating in the HUBZone program, your business must apply for re-certification every year. If you’re planning to apply for certification or re-certification, the steps are outlined on SBA’s general login system. You’ll also need to submit additional documents to verify your eligibility. 

SBA HUBZone Program Eligibility

In addition to being located in a HUBZone area, the business must also meet the following eligibility criteria to participate in the HUBZone program:

  • The business must meet the SBA’s definition of a small business (check SBA’s Size Standard Tool to know whether your business qualifies or not)
  • At least 51% of the business must be owned either by an American citizen, Community Development Company, an agricultural cooperative, or an Indian or Hawaiian tribe 
  • At least 35% of the company’s employees must reside within the HUBZone area

To verify whether your business qualifies for the program, you can use the SBA’s Certify website to get a preliminary assessment. 

How to Apply for the SBA HUBZone Program

The first thing you’ll need to do if you plan on participating in the SBA HUBZone program is to get your certification. Here’s how the application goes:

  1. Create a SAM.gov profile, or update it if you already have an account.  
  2. Create an account on the SBA’s General Login System and apply for a HUBZone certification from there. You’ll be asked to complete prompts to complete your application. 
  3. Once completed, you’ll receive an email outlining the instructions on how to verify your application. You must complete the verification process within 2 business days. 
  4. Submit all the required documentation. The SBA won’t start the evaluation process until the documents are complete. Be sure to have the documents ready to expedite the process. They may also require additional documents or information, so keep your line open and submit them within the next five days. Otherwise, your application will be withdrawn or declined.
  5. Visit your profile on SAM.gov to check if you’ve been approved or declined. The website usually updates your profile within 48 hours after approval. 

Bottom Line

The HUBZone Program can be a valuable resource if you’re a small business in the area and looking to get into government contracting. However, companies must meet the requirements and submit the documentation. Make sure you do your research before you begin the process so you can prepare the requirements before you start the application. 

About The Author

Dane Panes

Dane Panes is one of Gillman Bagley’s main content writers. Although she loved learning about every living thing on Earth, she decided to pursue her passion in writing in 2017 after getting her degree in Biology. Since then, she has written about various topics, including business-related ones, specifically in the financing and marketing niche.