The U.S. Small Business Administration (SBA) has expanded a contracting assistance program that allows small businesses in low-income communities that hire low-income residents to compete in the federal marketplace.
SBA Administrator Isabella Casillas Guzman announced on Tuesday that the agency had expanded the HUBZone program, allowing state governors to submit one petition per year requesting that the SBA designate qualifying areas as Governor-Designated Covered Areas. These qualifying areas can include Opportunity Zones.
Illinois was the first state to take advantage of the rule expansion, with the SBA adding 35 HUBZones across the state in five additional counties and 30 census tracts.
“This expansion of HUBZone areas in Illinois is a big step in bringing rural and underserved communities into a national network of small businesses with access to valuable support resources and contracting programs to better leverage the federal marketplace,” Guzman said in a statement. “We look forward to partnering with more businesses in these newly designated regions and hope to see more requests from our governors to expand covered areas in their states to support economic growth.”
To qualify for the Governor-Designated Covered Area, communities are required to have a population of 50,000 or fewer residents, must be located outside of an urban area, and must have an average unemployment rate that is at least 120 percent of the average national or state unemployment rate.
Under the HUBZone program, the SBA aims to direct at least three percent of federal contract dollars to HUBZone-certified companies each year. HUBZone-certified companies are required to be a small business that is at least 51-percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization, or an Indian tribe. The business must be headquartered in a HUBzone and have at least 35 percent of employees living in a HUBZone.