{"ok":true,"canonical_url":"https://dealroom.so/glossary/total-control-rule","api_url":"https://dealroom.so/api/public/glossary/total-control-rule","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":"total-control-rule","term":"Total Control Rule","group":"The loan itself","definition":"This SBA rule requires that a borrower, typically the small business owner, must have complete control over the business receiving the loan proceeds. It prevents loans from going to businesses where control is diluted or held by ineligible parties.","what_it_means":"For your SBA 7(a) loan, you as the buyer must demonstrate total control of the acquired business. This means you need to hold at least 51% equity or have equivalent operational control, especially if there are other investors or a retained seller interest. The SBA wants to know who is truly running the show.","url":"https://dealroom.so/glossary/total-control-rule","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"}],"related":[{"slug":"retained-seller-interest","term":"Retained Seller Interest","url":"https://dealroom.so/glossary/retained-seller-interest"},{"slug":"passive-investor","term":"Passive Investor","url":"https://dealroom.so/glossary/passive-investor"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"}],"related_questions":[{"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"},{"question":"How does the SBA define 'active ownership' for the 24-month rule?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-define-active-ownership-for-the-24-month-rule"},{"question":"How does the 'franchise rule' affect affiliation calculations for SBA 7(a) eligibility?","url":"https://dealroom.so/for-lenders/questions/how-does-the-franchise-rule-affect-affiliation-calculations-for-sba-7-a-eligibility"},{"question":"How does the 'not engaged in lending' rule apply to a loan applicant?","url":"https://dealroom.so/for-lenders/questions/how-does-the-not-engaged-in-lending-rule-apply-to-a-loan-applicant"},{"question":"What is the 24-month ownership rule for a $0-down SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/what-is-the-24-month-ownership-rule-for-a-0-down-sba-partner-buyout"},{"question":"How does the SBA's \"all available collateral\" rule apply when business assets are limited?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-s-all-available-collateral-rule-apply-when-business-assets-are-limited"}]},"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 — Total Control Rule","url":"https://dealroom.so/glossary/total-control-rule","source_type":"DealRoom Data"}}