{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-does-common-management-or-shared-facilities-trigger-affiliation-for-sba-7-a-size-dete","api_url":"https://dealroom.so/api/public/questions/when-does-common-management-or-shared-facilities-trigger-affiliation-for-sba-7-a-size-dete","question":"When does common management or shared facilities trigger affiliation for SBA 7(a) size determination?","topic":"Affiliation & Size","audience":"lender","bot_mode":"lender","short_answer":"Common management or shared facilities trigger affiliation when the same individual(s) manage or control the daily business operations or when two or more businesses share essential operational resources, indicating a lack of independence.","rule":"Affiliation rules are designed to prevent businesses that are not truly 'small' from receiving SBA assistance. Common management exists when one or more individuals or entities have the power to control, or in fact control, the management of both businesses. Shared facilities, particularly those critical to operations, suggest a shared identity or control, leading to affiliation.","example":"A borrower owns Business A and is seeking a 7(a) loan. The lender discovers the borrower's spouse owns Business B, and both businesses operate from the same physical address, sharing administrative staff and a single management team. The lender would likely find these businesses affiliated under common management and shared facilities.","what_lenders_check":"Lenders must identify all potential affiliates to accurately calculate the applicant's combined size against SBA standards. Misidentifying affiliation or failing to aggregate revenues/employees can result in an ineligible loan and subsequent guaranty denial.","required_facts":["Common ownership","Common management","Shared facilities","Operational control","Economic dependence"],"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":"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":"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":"What criteria does the SBA use to determine common management that triggers affiliation for size standard purposes?","url":"https://dealroom.so/for-lenders/questions/what-criteria-does-the-sba-use-to-determine-common-management-that-triggers-affiliation-fo"},{"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 determination","url":"https://dealroom.so/glossary/sba-size-determination"},{"term":"size determination","url":"https://dealroom.so/glossary/size-determination"},{"term":"Common management","url":"https://dealroom.so/glossary/common-management"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"}],"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-common-management-or-shared-facilities-trigger-affiliation-for-sba-7-a-size-dete","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."]}