{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/does-a-shared-commercial-lease-agreement-between-two-separate-businesses-trigger-affiliati","api_url":"https://dealroom.so/api/public/questions/does-a-shared-commercial-lease-agreement-between-two-separate-businesses-trigger-affiliati","question":"Does a shared commercial lease agreement between two separate businesses trigger affiliation for SBA size standards?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"Yes, shared facilities through a commercial lease agreement can trigger affiliation if it indicates common management or control between the two businesses.","rule":"SBA's affiliation rules consider a 'totality of the circumstances' test, including common management, identity of interest, and contractual relationships. Shared facilities, especially if managed jointly or if one entity substantially controls the other's operations through the lease, can imply affiliation.","example":"Two separate businesses, 'Cafe A' and 'Bakery B,' share a single commercial kitchen under a joint lease where they also share equipment, staff, and management duties. This common management and shared resources would likely lead to an affiliation determination, requiring their revenues/employees to be combined for size standards.","what_lenders_check":"Lenders must analyze all relationships between the applicant business and other entities, including shared resources, management, and contractual agreements, to accurately determine affiliation and size eligibility. Failure to identify affiliation can invalidate the SBA guaranty.","required_facts":["Shared facilities","Common management","Control","Lease terms","Totality of circumstances"],"source_families":["13 CFR Part 121 - Small Business Size Regulations","Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule","SOP 50 10 - Lender and Development Company Loan Programs","SBA Table of Size Standards"],"official_sources":[{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"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"},{"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":"SBA Table of Size Standards","url":"https://www.sba.gov/document/support-table-size-standards"}],"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":"Commercial lease agreement","url":"https://dealroom.so/glossary/commercial-lease-agreement"},{"term":"Lease agreement","url":"https://dealroom.so/glossary/lease-agreement"},{"term":"Small Business Size Standards","url":"https://dealroom.so/glossary/small-business-size-standards"},{"term":"Employee-Based Size Standards","url":"https://dealroom.so/glossary/employee-based-size-standards"},{"term":"Industry-Specific Size Standards","url":"https://dealroom.so/glossary/industry-specific-size-standards"},{"term":"SBA size determination","url":"https://dealroom.so/glossary/sba-size-determination"}],"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/does-a-shared-commercial-lease-agreement-between-two-separate-businesses-trigger-affiliati","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."]}