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Socially and Economically Disadvantaged Business Enterprise Fact Sheet

The Office of Minority and Women’s Business Enterprises (OMWBE) certifies small businesses owned by socially and economically disadvantaged persons.

What is the definition of a Socially and Economically Disadvantaged individual?

To qualify for certification, the primary owner(s) must be both socially and economically disadvantaged.

  1. A socially disadvantaged individual is a person subjected to racial or ethnic prejudice or cultural bias within American society because of his or her identity as a member of a group stemming from circumstances beyond her or his control.

    Some persons are presumed to be socially disadvantaged. For certification purposes, those persons are women and members of the following groups: Black/African American, Hispanic/Latino, Native American, Native Alaskan, Asian, Pacific Islander, or Native Hawaiian.

    Other persons who are not members of these groups may provide evidence of social disadvantage. These applications are evaluated on a case-by-case basis, and must include all of the following elements:

    1. At least one objective distinguishing feature that has contributed to social disadvantage.

    2. Personal experiences of substantial and chronic social disadvantage in American society.

    3. Negative impacts on entry into business or advancement in business.

  2. An economically disadvantaged individual is a person whose ability to compete in business has been impaired due to diminished capital and credit opportunities, as compared to others in the same or similar line of business who are not socially disadvantaged.

    The owners’ personal net worth generally may not exceed $1.32 million. This does not include equity in the owners’ personal residence or business for which the person is applying for certification.

    Please see the OMWBE’s personal net worth fact sheet for more information.

Applicable federal and state rules