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Small Business Requirements for Certification as a DBE

Deborah Gallant
March 15, 2024

There are definitely some perks to being a certified minority-owned business or woman-owned business, particularly if you want to bid on specific state and local government contracts. But before you start the process of certifying as a Disadvantaged Business Enterprise (DBE), be sure you meet the criteria for certification.

According to Sue Broadus, Program Manager at Pittsburgh Regional Transit, one of the five DBE certifying entities in Pennsylvania, simply being a woman business owner or a minority business owner isn’t enough. Your business also needs to fit the following:

  1. Applicant needs to be a citizen of the United States or a permanent resident 
  2. Business must also be a for-profit small business
  3. Business must be at least 51% ownership by one or more individuals who are socially and economically disadvantaged, defined as follows:
    • Socially disadvantaged
      • Women
      • Black Americans
      • Hispanic Americans
      • Native Americans
      • Asian-Pacific Americans
      • Subcontinent Asian Americans
      • Any person who demonstrates social disadvantage on an individual basis
    • Economically disadvantaged
      • Individual whose personal net worth does not exceed $1.32 million;  For married individuals, only their portion of jointly held assets is considered.
      • Small business that meets the SBA’s size standard AND does not exceed $30.40 million in average gross annual receipts (over five years)
  4. In the case of a corporation, at least 51% of the stock must be owned by such individuals, and they must also have control over the management and daily operations of the business.

One more thing: the socially disadvantaged individual must also possess expertise in the field in which the business operates. This means you can’t just find someone who matches the criteria above and put them in charge of your company as a means of becoming certified. 

Remember, you can’t just meet one of the requirements. Applicants must meet both socially and economically disadvantaged status. If all requirements are met, the applicant is eligible to apply for DBE certification.

How to start DBE certification for your business 

Application for eligible to apply is only the start of a pretty lengthy process. We’ve covered how-to for apply as an Economically Disadvantaged Business or DBE in Pennsylvania previously but you should also watch Sue’s presentation. She shares details and insight you won’t find anywhere else.

For members of Entrepreneurs Forever: if you’re a member of Entrepreneurs Forever, talk to your peer group to see if they have experience with the DBE certification process. Getting advice from other owners who have been there, done that, is invaluable in processes like this.

Not a member of Entrepreneurs Forever? Learn more about joining our free programs dedicated to improving outcomes for small business owners here.

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