{"ok":true,"canonical_url":"https://dealroom.so/glossary/control-factor","api_url":"https://dealroom.so/api/public/glossary/control-factor","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"control-factor","term":"Control Factor","group":"Reading the business","definition":"The percentage of ownership or operational influence an individual or entity has over a business. The SBA uses this to determine who is considered a \"principal\" and to assess affiliation.","what_it_means":"For an SBA loan, any individual with a 20% or more ownership stake is considered a \"principal\" and must provide a personal guaranty and undergo a character check. The SBA also evaluates control factors to determine if businesses are \"affiliated,\" which can impact size standard eligibility.","url":"https://dealroom.so/glossary/control-factor","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"key-principal","term":"Key principal","url":"https://dealroom.so/glossary/key-principal"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"size-standard","term":"Size standard","url":"https://dealroom.so/glossary/size-standard"}],"related_questions":[{"question":"What is the primary factor determining the interest rate on an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-is-the-primary-factor-determining-the-interest-rate-on-an-sba-7-a-loan"},{"question":"What is the primary factor a lender considers when evaluating the cash flow from an acquired business?","url":"https://dealroom.so/sba-7a/questions/what-is-the-primary-factor-a-lender-considers-when-evaluating-the-cash-flow-from-an-acquir"},{"question":"What is the primary factor the SBA considers when evaluating a new business owner's management experience?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-factor-the-sba-considers-when-evaluating-a-new-business-owner-s-manage"},{"question":"What is the primary factor the SBA considers when evaluating management experience for a new business acquisition?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-factor-the-sba-considers-when-evaluating-management-experience-for-a-n"},{"question":"How does personal collateral, like my home, factor into a $700,000 SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-does-personal-collateral-like-my-home-factor-into-a-700-000-sba-7-a-acquisition-loan"},{"question":"How does the SBA define 'total control' rule to determine affiliation for size standards?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-total-control-rule-to-determine-affiliation-for-size-standards"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Control Factor","url":"https://dealroom.so/glossary/control-factor","source_type":"DealRoom Data"}}