{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-common-control-when-assessing-affiliation-for-a-management-comp","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-determine-common-control-when-assessing-affiliation-for-a-management-comp","question":"How does the SBA determine \"common control\" when assessing affiliation for a management company providing services?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"The SBA determines \"common control\" for a management company by assessing if the same individuals or entities manage or have the power to control both the applicant business and the management company.","rule":"A management company that provides critical management services to an applicant business is affiliated with the applicant if the same individuals or entities have the power to control both. This \"common control\" can arise from identical ownership, shared management, or contractual agreements that grant significant influence over operational and policy decisions to the same party.","example":"John Smith owns 100% of \"Main Street Business,\" which applies for a 7(a) loan. John also owns 100% of \"John's Management Services LLC,\" which provides all executive management functions for Main Street Business. Due to common ownership and shared management, John's Management Services LLC would be affiliated with Main Street Business.","what_lenders_check":"Lenders must diligently identify management companies and their relationship to the applicant. Failure to recognize and properly affiliate a management company can result in miscalculation of the applicant's size, leading to an ineligible loan.","required_facts":["Management company","Common control","Shared ownership","Shared management","Contractual influence"],"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"],"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"}],"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":"Common management","url":"https://dealroom.so/glossary/common-management"},{"term":"Common Control","url":"https://dealroom.so/glossary/common-control"},{"term":"Management company","url":"https://dealroom.so/glossary/management-company"},{"term":"Management Control","url":"https://dealroom.so/glossary/management-control"},{"term":"Shared Services","url":"https://dealroom.so/glossary/shared-services"},{"term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"}],"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-common-control-when-assessing-affiliation-for-a-management-comp","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."]}