{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/beyond-common-officers-directors-how-does-a-lender-assess-affiliation-through-shared-key-e","api_url":"https://dealroom.so/api/public/questions/beyond-common-officers-directors-how-does-a-lender-assess-affiliation-through-shared-key-e","question":"Beyond common officers/directors, how does a lender assess affiliation through \"shared key employee functions\" for SBA size standards?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"A lender assesses affiliation through shared key employee functions by identifying individuals holding critical operational roles across multiple businesses, even if not formally officers or directors, to determine if they exercise control.","rule":"Affiliation can arise when a single individual or group of individuals manages or controls two or more businesses, regardless of ownership percentage. This extends beyond formal titles to those who perform key functions or exert substantial influence over strategic decisions, operations, or resource allocation across entities, indicating potential control.","example":"A lender reviews two businesses with separate owners but discovers the same Chief Operating Officer (COO) and head of sales manage both entities. The lender would evaluate if these shared key employees exercise sufficient control to establish affiliation, requiring the businesses to combine their revenues for size standard determination.","what_lenders_check":"Lenders must look beyond formal organizational charts and ownership structures to identify de facto control exercised through shared key management or operational personnel, ensuring accurate affiliation determinations for size eligibility.","required_facts":["Common management","Key employees","Shared functions","Control determination","Size standards"],"source_families":["13 CFR Part 121 - Small Business Size Regulations","SOP 50 10 - Lender and Development Company Loan Programs","Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule"],"official_sources":[{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule","url":"https://www.federalregister.gov/documents/2023/04/10/2023-07173/affiliation-and-lending-criteria-for-the-sba-business-loan-programs"}],"related_questions":[{"question":"When does a contractual relationship between two businesses trigger affiliation for size standard calculations?","url":"https://dealroom.so/for-lenders/questions/when-does-a-contractual-relationship-between-two-businesses-trigger-affiliation-for-size-s"},{"question":"How does ownership of options or warrants affect affiliation determination for SBA size standards?","url":"https://dealroom.so/for-lenders/questions/how-does-ownership-of-options-or-warrants-affect-affiliation-determination-for-sba-size-st"},{"question":"What are the size standard requirements for a business applying for a 7(a) loan if it operates internationally?","url":"https://dealroom.so/for-lenders/questions/what-are-the-size-standard-requirements-for-a-business-applying-for-a-7-a-loan-if-it-opera"},{"question":"What specific scenarios involving shared directors, officers, or key employees constitute 'common management' triggering affiliation for SBA size determination?","url":"https://dealroom.so/for-lenders/questions/what-specific-scenarios-involving-shared-directors-officers-or-key-employees-constitute-co"},{"question":"Under what conditions does a shared economic interest trigger affiliation for SBA size standard purposes?","url":"https://dealroom.so/for-lenders/questions/under-what-conditions-does-a-shared-economic-interest-trigger-affiliation-for-sba-size-sta"},{"question":"How does the 'totality of the circumstances' rule apply when determining affiliation for SBA size standards?","url":"https://dealroom.so/for-lenders/questions/how-does-the-totality-of-the-circumstances-rule-apply-when-determining-affiliation-for-sba"}],"related_terms":[{"term":"Officers/Directors","url":"https://dealroom.so/glossary/officers-directors"},{"term":"Key employee","url":"https://dealroom.so/glossary/key-employee"},{"term":"Officers","url":"https://dealroom.so/glossary/officers"},{"term":"Pass-Through","url":"https://dealroom.so/glossary/pass-through"},{"term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"term":"Shared Services","url":"https://dealroom.so/glossary/shared-services"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/beyond-common-officers-directors-how-does-a-lender-assess-affiliation-through-shared-key-e","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}