{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-affiliation-between-businesses-controlled-by-a-common-trust","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-determine-affiliation-between-businesses-controlled-by-a-common-trust","question":"How does the SBA determine affiliation between businesses controlled by a common trust?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"Affiliation is triggered if a trust, or the trustee(s) and its beneficiaries, controls or has the power to control two or more businesses. The SBA looks beyond legal form to actual control.","rule":"Under SBA's affiliation rules, entities are affiliated when one controls or has the power to control the other, or a third party (or parties) controls or has the power to control both. For trusts, the SBA considers the power of the trustee to manage the trust's assets and the beneficiaries' ability to remove the trustee or terminate the trust as indicators of control, which can lead to affiliation between businesses held by the trust.","example":"A family trust holds 100% ownership of Business A and 60% ownership of Business B. The same individual serves as trustee for both. Since the trustee controls both businesses, Business A and Business B are affiliated, and their revenues must be combined for SBA size standard purposes.","what_lenders_check":"Lenders must meticulously review trust agreements, identify trustees and beneficiaries, and determine their powers. This is crucial for accurately assessing ownership and control to perform correct size standard calculations and identify all required guarantors.","required_facts":["Trust ownership","Trustee's control","Beneficiary powers","Common control"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 121 - Small Business Size Regulations","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 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"}],"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":"SBA size determination","url":"https://dealroom.so/glossary/sba-size-determination"},{"term":"SBA size standard","url":"https://dealroom.so/glossary/sba-size-standard"},{"term":"Affiliated businesses","url":"https://dealroom.so/glossary/affiliated-businesses"},{"term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"term":"Trust","url":"https://dealroom.so/glossary/trust"},{"term":"Common officer","url":"https://dealroom.so/glossary/common-officer"}],"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-determine-affiliation-between-businesses-controlled-by-a-common-trust","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."]}