{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-associate-for-purposes-of-collecting-personal-guarantees-on-a-7-a-","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-define-associate-for-purposes-of-collecting-personal-guarantees-on-a-7-a-","question":"How does the SBA define \"associate\" for purposes of collecting personal guarantees on a 7(a) loan?","topic":"Personal guarantees & affiliation","audience":"lender","bot_mode":"lender","short_answer":"The SBA defines an \"associate\" broadly to include individuals and entities closely tied to the applicant, requiring them to provide a personal guaranty if they own 20% or more of the business, or have sufficient control.","rule":"An \"associate\" is defined as an officer, director, or managing member of the applicant; any owner of 20% or more of the applicant; any person or entity that controls or has the power to control the applicant; or any other person or entity determined by the SBA to be closely connected to the applicant. All owners of 20% or more must provide an unconditional personal guaranty.","example":"A business is owned 40% by John, 30% by Sarah, 20% by Mike, and 10% by a passive investor, Lisa. John, Sarah, and Mike must provide personal guarantees. Even though Lisa is an owner, she may not be required to guarantee if she holds less than 20% and has no control.","what_lenders_check":"Lenders must identify all 20% or more owners and any individuals with control over the applicant, ensuring all required personal guarantees are obtained. Failure to do so can lead to a guaranty repair or denial during liquidation.","required_facts":["Ownership percentage","Control over business","Officer/director role","Lender due diligence","Guaranty requirement"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule"],"official_sources":[{"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":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"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":"Are there specific circumstances where the SBA might require a corporate guaranty in addition to personal guarantees?","url":"https://dealroom.so/for-lenders/questions/are-there-specific-circumstances-where-the-sba-might-require-a-corporate-guaranty-in-addit"}],"related_terms":[{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Aggregate SBA 7(a) Loan Eligibility","url":"https://dealroom.so/glossary/aggregate-sba-7-a-loan-eligibility"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"Claim on the SBA Guarantee","url":"https://dealroom.so/glossary/claim-on-the-sba-guarantee"}],"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/how-does-the-sba-define-associate-for-purposes-of-collecting-personal-guarantees-on-a-7-a-","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."]}