SBA's Mentor-Protégé Expansion Final Rule Expected This Month

SBA has announced that its final rule implementing the long-awaited expansion of the mentor-protégé joint venture program under the 2013 National Defense Authorization Act (NDAA) will be released this month. The new program, available to all categories of small businesses, not just 8(a) participants, will create significant new opportunities for large and small businesses alike.

Under the current regime, the mentor-protégé program and its beneficial joint-affiliation exemptions are limited to small, socioeconomically disadvantaged small businesses participating in SBA's 8(a) business development program. The benefits to participants are manifold. First, 8(a) protégé businesses are granted an exception to the general rule that joint venture partners are deemed affiliated, allowing them to team with large businesses without jeopardizing their size status via affiliation.  It also allows large business mentors to own up to 40 percent of the protégé, thus providing