# 13 C.F.R. § 124.107 (2026): What is potential for success? > Federal · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_107 ## Section - **Citation:** 13 C.F.R. § 124.107 (2026) - **Heading:** What is potential for success? - **Jurisdiction:** Federal - **Kind:** Regulations - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** Title 13 CFR: Business Credit and Assistance / Chapter I: SMALL BUSINESS ADMINISTRATION / Part 124: 8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS DETERMINATIONS / Subpart A: 8(a) Business Development / § 124.107: § 124.107 What is potential for success? ## Text SBA must determine that with contract, financial, technical, and management support from the 8(a) BD program, from contractors or from others assisting with business operations, the applicant concern is able to perform 8(a) contracts and possess reasonable prospects for success in competing in the private sector. To do so, the applicant concern must show that it has operated and received contracts (either in the private sector, at the state or local government level, or with the Federal Government) in its primary industry classification for at least two full years immediately prior to the date of its 8(a) BD application, unless a waiver for this requirement is granted pursuant to paragraph (b) of this section. (a) Income tax returns for each of the two previous tax years must show operating revenues. (b)(1) SBA may waive the two years in business requirement if each of the following five conditions are met: (i) The individual or individuals upon whom eligibility is based have substantial business management experience; (ii) The applicant has demonstrated technical experience to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD program; (iii) The applicant has adequate capital to sustain its operations and carry out its business plan as a Participant; (iv) The applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its primary industry category; and technical experience to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD program; (iii) The applicant has adequate capital to sustain its operations and carry out its business plan as a Participant; (iv) The applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its primary industry category; and (v) The applicant has, or can demonstrate its ability to timely obtain, the personnel, facilities, equipment, and any other requirements needed to perform contracts as a Participant. (2) The concern seeking a waiver under paragraph (b) must provide information on governmental and nongovernmental contracts in progress and completed (including letters of reference) in order to establish successful contract performance, and must demonstrate how it otherwise meets the five conditions for waiver. SBA considers an applicant's performance on both government and private sector contracts in determining whether the firm has an overall successful performance record. If, however, the applicant has performed only government contracts or only private sector contracts, SBA will review its performance on those contracts alone to determine whether the applicant possesses a record of successful performance. (c) In assessing potential for success, SBA considers the concern's access to credit and capital, including, but not limited to, access to long-term financing, access to working capital financing, equipment trade credit, access to raw materials and supplier trade credit, and bonding capability. n those contracts alone to determine whether the applicant possesses a record of successful performance. (c) In assessing potential for success, SBA considers the concern's access to credit and capital, including, but not limited to, access to long-term financing, access to working capital financing, equipment trade credit, access to raw materials and supplier trade credit, and bonding capability. (d) In assessing potential for success, SBA will also consider the technical and managerial experience of the applicant concern's managers, the operating history of the concern, the concern's record of performance on previous Federal and private sector contracts in the primary industry in which the concern is seeking 8(a) BD certification, and its financial capacity. The applicant concern as a whole must demonstrate both technical knowledge in its primary industry category and management experience sufficient to run its day-to-day operations. (e) An applicant will not be denied admission into the 8(a) BD program due solely to a determination that potential 8(a) contract opportunities are unavailable to assist in the development of the concern unless: (1) The Government has not previously procured and is unlikely to procure the types of products or services offered by the concern; or (2) The purchase of such products or services by the Federal Government will not be in quantities sufficient to support the developmental needs of the applicant and other Participants providing the same or similar items or services. [63 FR 35739, June 30, 1998, as amended at 88 FR 26204, Apr. 27, 2023; 89 FR 102488, Dec. 17, 2024] ## Nearby sections - [13 C.F.R. § 124.1 (2026) § 124.1 What is the purpose of the 8(a) Business Development program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_1.md) - [13 C.F.R. § 124.2 (2026) § 124.2 What length of time may a business participate in the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_2.md) - [13 C.F.R. § 124.3 (2026) § 124.3 What definitions are important in the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_3.md) - [13 C.F.R. § 124.101 (2026) § 124.101 What are the basic requirements a concern must meet for the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_101.md) - [13 C.F.R. § 124.102 (2026) § 124.102 What size business is eligible to participate in the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_102.md) - [13 C.F.R. § 124.103 (2026) § 124.103 Who is socially disadvantaged?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_103.md) - [13 C.F.R. § 124.104 (2026) § 124.104 Who is economically disadvantaged?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_104.md) - [13 C.F.R. § 124.105 (2026) § 124.105 What does it mean to be unconditionally owned by one or more disadvantaged individuals?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_105.md) - [13 C.F.R. § 124.106 (2026) § 124.106 When do disadvantaged individuals control an applicant or Participant?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_106.md) - [13 C.F.R. § 124.107 (2026) § 124.107 What is potential for success?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_107.md) - [13 C.F.R. § 124.108 (2026) § 124.108 What other eligibility requirements apply for individuals or businesses?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_108.md) - [13 C.F.R. § 124.109 (2026) § 124.109 Do Indian tribes and Alaska Native Corporations have any special rules for applying to and remaining eligible for the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_109.md) - [13 C.F.R. § 124.110 (2026) § 124.110 Do Native Hawaiian Organizations (NHOs) have any special rules for applying to and remaining eligible for the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_110.md) - [13 C.F.R. § 124.111 (2026) § 124.111 Do Community Development Corporations (CDCs) have any special rules for applying to and remaining eligible for the 8(a) BD program?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_111.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/CFR_T13_P124_S124_107. Check the current official text before relying on it. Not legal advice.