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Small Disadvantaged Business Definition

Supplier Power > Small Disadvantaged Business Definition

Small Disadvantaged Business Definition

Small Disadvantaged Business Definition


Minority businesses in federal procurement are called disadvantaged businesses. A small disadvantaged business is a small business that also meets the following criteria:


  1. At least 51 percent-owned by one or more individuals who are both socially and economically disadvantaged.
  2. A publicly owned business with at least 51 percent of its stock owned by one or more socially and economically disadvantaged individuals with its management and daily business controlled by such individuals.
  3. Socially disadvantaged individuals mean individuals who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group without regard to their qualities as individuals.
  4. Economically disadvantaged individuals mean socially disadvantaged individuals whose ability to compete in the free enterprise system is impaired due to diminished opportunities to obtain capital and credit as compared to others in the same line of business who are not socially and economically disadvantaged.
  5. Individuals who certify that they are members of the following groups are considered to be socially and economically disadvantaged:
    • Black Americans
    • Hispanic Americans
    • Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians)
    • Asian-Pacific Americans
    • Subcontinent-Asian Americans


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Joe Flynn

Joe Flynn is the founder of Lavante Inc. a leading provider of Supplier Information Management Services for Fortune 500 Companies. Supplier Power is a personal blog designed to help small businesses understand the complexities and requirements that large corporations have.

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