The U.S. government defines “socially and economically disadvantaged” individuals under the Small Business Act (15 USC 637) as:
(5) Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.(6)(A) Economically disadvantaged individuals are those 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 business area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Administration shall consider, but not be limited to, the assets and net worth of such socially disadvantaged individual.
This coverage extends only to socially and economically disadvantaged U.S. citizens, or those who have been lawfully admitted permanent U.S. residency. Individuals not mentioned in the act may be considered on a case-by-case basis.
Individuals specifically mentioned include:
- Black Americans
- Hispanic Americans regardless of race, culture, or origin
- Asian-Pacific Americans and Subcontinent Asian Americans
- Native Americans including Native Hawaiians, Eskimos, Aleuts, and American Indians
Women are presumed to be included under the act because of social, and therefore, economic, disadvantages women encounter.
