{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-if-multiple-businesses-are-affiliated-for-size-standard-purpose","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-determine-if-multiple-businesses-are-affiliated-for-size-standard-purpose","question":"How does the SBA determine if multiple businesses are affiliated for size standard purposes based on common ownership?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"Affiliation is determined by control, primarily through ownership. If one individual or entity owns 50% or more of two or more businesses, those businesses are typically affiliated and their revenues/employees are combined for size testing.","rule":"The SBA's affiliation rules are designed to prevent larger businesses from segmenting operations to qualify for small business programs. Common ownership is a primary trigger: if a person or entity owns 50% or more of a business, they are considered to control it. If they control another business, those businesses are affiliated.","example":"A borrower owns 60% of Business A (a trucking company) and 55% of Business B (a logistics firm). For a loan to Business B, the lender must combine the revenues and employees of both Business A and Business B to determine if Business B meets the SBA's size standard for its primary industry.","what_lenders_check":"Lenders must meticulously identify all owners and their ownership percentages in other businesses to correctly assess affiliation. Failure to identify affiliates can lead to an ineligible loan and a denial of the SBA guaranty.","required_facts":["Common ownership","Control","Size standards","Combined revenue","Combined employees","Affiliation"],"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","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":"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"},{"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":"Affiliated businesses","url":"https://dealroom.so/glossary/affiliated-businesses"},{"term":"SBA size standard","url":"https://dealroom.so/glossary/sba-size-standard"},{"term":"Size standard","url":"https://dealroom.so/glossary/size-standard"},{"term":"Claim on the SBA Guarantee","url":"https://dealroom.so/glossary/claim-on-the-sba-guarantee"},{"term":"Business size standard","url":"https://dealroom.so/glossary/business-size-standard"},{"term":"Size standard compliance","url":"https://dealroom.so/glossary/size-standard-compliance"}],"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-if-multiple-businesses-are-affiliated-for-size-standard-purpose","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."]}