Socially disadvantaged individuals are those who have been subject to racial or ethnic prejudice or cultural bias within American society because of their identification as members of certain groups. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to quality. Successful applicants must also meet applicable size standards for small businesses in their industry.

Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system 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. Economically disadvantaged must be established for all applicants. The SBA determines eligibility on a case-by-case basis.