{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-does-a-shared-management-team-between-two-entities-trigger-affiliation-for-sba-size-s","api_url":"https://dealroom.so/api/public/questions/when-does-a-shared-management-team-between-two-entities-trigger-affiliation-for-sba-size-s","question":"When does a shared management team between two entities trigger affiliation for SBA size standards?","topic":"Affiliation & size","audience":"lender","bot_mode":"lender","short_answer":"Affiliation is triggered when common management (e.g., shared directors, officers, or key employees) exists between two or more entities, giving one the power to control the other.","rule":"The SBA considers entities affiliated if they share common management, meaning that one or more individuals who control the management of one concern also control the management of another. This 'common management' rule can apply even without direct ownership, based on the ability to direct operations or influence decisions.","example":"Mr. Smith is the CEO of Company A, an applicant for a 7(a) loan. He is also on the Board of Directors and actively involved in operations for Company B, a separate legal entity. The lender would likely find Company A and Company B affiliated due to common management.","what_lenders_check":"Lenders must identify all key management personnel and their roles in other entities. A thorough review of resumes, organizational charts, and public filings is crucial to uncover potential common management affiliation.","required_facts":["Common management","Shared directors","Shared officers","Key employees","Control"],"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":"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 Franchise Team","url":"https://dealroom.so/glossary/sba-franchise-team"},{"term":"Small Business Size Standards","url":"https://dealroom.so/glossary/small-business-size-standards"},{"term":"Employee-Based Size Standards","url":"https://dealroom.so/glossary/employee-based-size-standards"},{"term":"Industry-Specific Size Standards","url":"https://dealroom.so/glossary/industry-specific-size-standards"},{"term":"Related Entities","url":"https://dealroom.so/glossary/related-entities"},{"term":"SBA size determination","url":"https://dealroom.so/glossary/sba-size-determination"}],"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/when-does-a-shared-management-team-between-two-entities-trigger-affiliation-for-sba-size-s","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."]}