Hundreds of Small Firms in Economically Disadvantaged Areas May Now Qualify for HUBZone Certification
Today, the U.S. Small Business Administration (SBA) announced the launch of a new Historically Underutilized Business Zone (HUBZone) preview map, which shows that hundreds of firms in newly released designated underserved areas will become eligible to apply for HUBZone certification, enabling them to compete for billions of dollars in federal contracts set aside for HUBZone-certified firms, to create jobs, and to improve the economy in their communities.
“By channeling a record $14 billion in federal purchases to HUBZone-certified small firms last year, the Biden-Harris Administration gave a critical financial boost to hundreds of entrepreneurs in economically disadvantaged rural and urban areas,” said Administrator Isabella Casillas Guzman. “The HUBZone Program is an essential component of President Biden’s commitment to expanding federal contracting opportunities for small businesses across the country.”
The HUBZone preview map shows changes that are scheduled to take effect on July 1, 2023, reflecting updates from the 2020 U.S. Census. HUBZones are designated based on economic and population data from the Census Bureau and other federal agencies, using a formula established by Congress. The map update highlights growth opportunities for small businesses in more than 20,000 HUBZone areas across the United States and Territories, including 3,732 newly qualified communities.
“For small businesses in new HUBZone areas, SBA’s certification provides a gateway to billions of dollars in federal contracting opportunities, contributing to the economic growth and strengthening of underserved communities while also ensuring that employment opportunities benefit the people living in communities that most need positive economic impact,” said Lori Gillen, Director of the Office of the HUBZone Program.
At the same time, according to the new map, many currently HUBZone-designated areas will no longer qualify for participation in the program because they have outgrown their disadvantaged status thanks to increased employment, increased average incomes, or other signs of positive economic development. To provide a sufficient off-ramp for communities losing this designation, the expiration of their HUBZone status is being extended until
July 1, 2026, providing firms and communities additional time to transition.
In addition, HUBZone-certified firms with principal offices in areas that have been in “Redesignated” status since 2018, and whose communities have had time to transition out of the program will officially lose their HUBZone eligibility after July 1, 2023, unless they relocate their principal offices to qualifying areas.
Before the upcoming changes, HUBZone-certified firms should verify that they will meet the 35 percent HUBZone employee residency and principal office requirements on their annual recertification anniversary date following July 1, 2023. Firms eligible at the time of offer for a HUBZone contract are generally considered to be HUBZone firms through the life of that contract, meaning current HUBZone contracts will not be disrupted by the map update.
For a map of current HUBZones, visit https://maps.certify.sba.gov/hubzone/map.
The preview of the new HUBZone map, which will go into effect on July 1, is available at https://preview-maps.certify.sba.gov/.
The SBA encourages small businesses to learn more about the HUBZone Program at the SBA website: https://www.sba.gov/federal-contracting/contracting-assistance-programs/hubzone-program.
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About the HUBZone Program
SBA encourages the economic development of underserved communities across the country by supporting the federal government’s goal to award three percent of contracting dollars each year to small businesses located in historically underutilized business zones (HUBZones.) The HUBZone Program certifies firms and collaborates with federal agencies and communities to encourage and expand participation.
The HUBZone Program has rolled out a new key initiative in Governor-Designated Areas, which provides increased opportunities to expand the HUBZone Program into distressed rural communities. It allows state governors to petition SBA once a year to designate certain rural areas as HUBZones. This has expanded the HUBZone Program and created more economic opportunities in rural areas. To date, 13 governors have requested additional HUBZone areas through this initiative, adding 231 rural areas to the HUBZone map.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.