{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-criteria-does-the-sba-use-to-determine-common-management-that-triggers-affiliation-fo","api_url":"https://dealroom.so/api/public/questions/what-criteria-does-the-sba-use-to-determine-common-management-that-triggers-affiliation-fo","question":"What criteria does the SBA use to determine common management that triggers affiliation for size standard purposes?","topic":"Affiliation & Size","audience":"lender","bot_mode":"lender","short_answer":"Common management triggers affiliation if one or more individuals or entities control the management of two or more businesses, or if a single individual or entity has the power to control the management of two or more businesses.","rule":"SBA regulations consider businesses affiliated if they have common management, meaning that the same individuals or entities direct the day-to-day operations or strategic planning of multiple businesses. This can include overlapping officers, directors, or key employees, even if ownership is separate.","example":"The CEO of Company A also serves as the Chairman of the Board and makes key operational decisions for Company B. Even if Company A and B have different owners, this common management would trigger affiliation, requiring their employee numbers/revenues to be combined for size standard eligibility.","what_lenders_check":"Lenders must thoroughly investigate management structures across all related entities, including board positions and key officer roles. Undisclosed common management can lead to an incorrect size determination and a potential guaranty repair or denial.","required_facts":["Common management","Control of operations","Overlapping officers","Directors","Key employees","Strategic planning"],"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"],"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"}],"related_questions":[{"question":"How does the SBA define 'affiliation' when checking business size?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-affiliation-when-checking-business-size"},{"question":"When does common management or shared facilities trigger affiliation for SBA 7(a) size determination?","url":"https://dealroom.so/for-lenders/questions/when-does-common-management-or-shared-facilities-trigger-affiliation-for-sba-7-a-size-dete"},{"question":"What factors are considered when evaluating affiliation between businesses that share common management?","url":"https://dealroom.so/for-lenders/questions/what-factors-are-considered-when-evaluating-affiliation-between-businesses-that-share-comm"},{"question":"What are the financial criteria for a business to qualify as 'small' under the alternative size standard?","url":"https://dealroom.so/for-lenders/questions/what-are-the-financial-criteria-for-a-business-to-qualify-as-small-under-the-alternative-s"},{"question":"Does an unfunded stock option agreement trigger affiliation for SBA 7(a) size standard calculations?","url":"https://dealroom.so/for-lenders/questions/does-an-unfunded-stock-option-agreement-trigger-affiliation-for-sba-7-a-size-standard-calc"},{"question":"How does a lender determine affiliation when a prior owner retains less than 20% equity and a consulting contract?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-affiliation-when-a-prior-owner-retains-less-than-20-equity-and"}],"related_terms":[{"term":"SBA size standard","url":"https://dealroom.so/glossary/sba-size-standard"},{"term":"Common management","url":"https://dealroom.so/glossary/common-management"},{"term":"Size standard","url":"https://dealroom.so/glossary/size-standard"},{"term":"Business size standard","url":"https://dealroom.so/glossary/business-size-standard"},{"term":"Size standard compliance","url":"https://dealroom.so/glossary/size-standard-compliance"},{"term":"Alternative size standard","url":"https://dealroom.so/glossary/alternative-size-standard"}],"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/what-criteria-does-the-sba-use-to-determine-common-management-that-triggers-affiliation-fo","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."]}