8(a) regulations require that ownership in the firm by one or more disadvantaged individual(s) be direct ownership. Generally, SBA does not consider ownership by a trust to be direct ownership. However, ownership by a trust, such as a living trust, may be considered the functional equivalent of direct ownership if the following conditions are met:
- The trust is revocable;
- The disadvantaged individual is the grantor of the trust;
- The disadvantaged individual is a trustee of the trust; and,
- The disadvantaged individual is the sole current beneficiary of the trust.