The requirements for qualification in SBA’s 8(a) program can be found in 13 CFR 124.  The basic rule is that (under 13 CFR 124.101), “a concern meets the basic requirements for admission to the 8(a) BD program if it is a small business which is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States, and which demonstrates potential for success” (emphasis added).

For our purposes here, we need to focus on what is meant by “socially disadvantaged.”  The general rule on who is socially disadvantaged is that (under 13 CFR 124.103(a)), “[s]ocially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control” (emphasis added).

If an applicant is not a member of one of the designated communities of individuals presumed to be socially disadvantaged (as listed in 13 CFR 124.103(b)) — neither Muslim nor Arab is included —  he or she much prove “by a preponderance of the evidence” that he or she has been subjected to racial or ethnic prejudice or cultural bias.  In particular, 13 CFR 124.103(c)(2) requires that the applicant address three elements to show social disadvantage (in summary):

1. some objective distinguishing feature that has contributed to social disadvantage;
2. personal experiences of substantial and chronic social disadvantage in American society; and
3. showing negative impact on entry into or advancement into the business world because of the disadvantage.

SBA is bound to consider all relevant information provided by an applicant, including information about his educational experiences, employment and business history.

In order to see how these regulations are applied to actual cases, there are two particularly helpful decisions by the SBA Office of Hearings and Appeals (OHA):  Ace Technical, LLC, SBA No. SDBA-178 (2008) and Seacoast Asphalt Services, Inc, SBA No. SDBA-151 (2001).

With respect to the first requirement, we learn from these decisions that Middle Eastern ethnicity (let alone being Muslim or of Arab descent) or is itself a distinguishing feature that can contribute to social disadvantage, and may alone be sufficient proof of a “distinguishing feature.”  However, out of an abundance of caution, applicants should also be prepared to present examples of the existence of the overwhelming evidence that discrimination against Muslim Americans of Arab descent is pervasive in our society.

With respect to the second and third requirements (which are essentially intertwined), we learn that an applicant’s statements must be specific with regard to (1) when and where the incidents occurred, (2) who committed the acts, (3) how the incidents took place, and (4) how the applicant was adversely affected.  An applicant’s statement is entitled to credence unless the SBA articulates reasons why his or her statement should not be believed, and the SBA must recognize that, in evaluating the evidence, the applicant’s statements may be the only available evidence.  In addition, the absence of additional supporting evidence to bolster an applicant’s claim of social disadvantage does not mean that his claim has not been proven.  In essence, it’s not the number of examples you can provide, it’s the quality and level of detail you can provide for the examples you do provide.  In addition, the decisions tell us that this requirement can be met when the applicant presents any relevant evidence, particularly disadvantage in education, employment, and business history.  It is not necessary for the Applicant to present evidence of all of these areas.  That being said, applicants would be best served if they can provide evidence covering all three areas.

So yes… a Muslim American of Arab descent can in fact qualify as an SBA 8(a) participant, but it is by no means a simple or quick process.  An applicant must convince SBA that he or she is socially disadvantaged “by a preponderance of the evidence”, which requires multiple specific examples of discrimination, preferably with third party corroboration.