{"ok":true,"canonical_url":"https://dealroom.so/glossary/impermissible-affiliation","api_url":"https://dealroom.so/api/public/glossary/impermissible-affiliation","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":"impermissible-affiliation","term":"Impermissible Affiliation","group":"People and paperwork","definition":"This occurs when the SBA considers your business and another entity too closely related, making your business ineligible for an SBA loan. It matters because it can kill your loan application before it even starts.","what_it_means":"The SBA has strict rules on what constitutes \"affiliation,\" looking at factors like ownership, management, and contractual relationships. If your deal involves prior business relationships with the seller or other entities, or if you have significant ownership in other businesses, you need to scrutinize potential affiliation issues early. Work with your lender to ensure your deal structure doesn't trigger an impermissible affiliation.","url":"https://dealroom.so/glossary/impermissible-affiliation","official_sources":[{"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"},{"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"}],"related":[{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"size-standard","term":"Size standard","url":"https://dealroom.so/glossary/size-standard"},{"slug":"ineligible-businesses-rule","term":"Ineligible businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule"},{"slug":"delegated-lender","term":"Delegated Lender","url":"https://dealroom.so/glossary/delegated-lender"}],"related_questions":[{"question":"How does a lender determine if a franchise agreement contains impermissible control provisions not listed on the Directory?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-franchise-agreement-contains-impermissible-control-provis"},{"question":"How does the SBA define 'affiliation' when checking business size?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-define-affiliation-when-checking-business-size"},{"question":"How does common management trigger affiliation for size standard purposes?","url":"https://dealroom.so/for-lenders/questions/how-does-common-management-trigger-affiliation-for-size-standard-purposes"},{"question":"How does common management trigger affiliation for SBA size standard purposes?","url":"https://dealroom.so/sba-7a/questions/how-does-common-management-trigger-affiliation-for-sba-size-standard-purposes"},{"question":"What constitutes 'common management' triggering affiliation for SBA 7(a) size determination?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-common-management-triggering-affiliation-for-sba-7-a-size-determination"},{"question":"What specific conditions trigger affiliation due to contractual relationships or franchise agreements?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-trigger-affiliation-due-to-contractual-relationships-or-franchise"}]},"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 — Impermissible Affiliation","url":"https://dealroom.so/glossary/impermissible-affiliation","source_type":"DealRoom Data"}}