{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-does-common-ownership-through-a-trust-or-estate-create-affiliation-for-size-purposes","api_url":"https://dealroom.so/api/public/questions/when-does-common-ownership-through-a-trust-or-estate-create-affiliation-for-size-purposes","question":"When does common ownership through a trust or estate create affiliation for size purposes?","topic":"Affiliation & Size","audience":"lender","bot_mode":"lender","short_answer":"Common ownership through a trust or estate creates affiliation if the trust or estate (or its beneficiaries/fiduciaries) controls or has the power to control another business.","rule":"SBA's affiliation rules extend to entities controlled by trusts or estates. If a trust or estate holds a controlling interest (usually 50% or more, but can be less if control is evident) in one business, and the same trust or estate, or its fiduciaries/beneficiaries, controls another business, those businesses are affiliated. Control can be direct or indirect.","example":"A family trust owns 60% of 'Company A.' The same family trust's sole beneficiary also owns 70% of 'Company B.' The lender must deem Company A and Company B affiliated due to common ownership and control through the trust/beneficiary, and combine their revenues for size testing.","what_lenders_check":"Lenders must identify all entities with common ownership or control, including trusts and estates, and their beneficiaries or fiduciaries. They need to analyze trust documents and ownership structures to accurately determine control and apply affiliation rules, as misidentifying affiliates can lead to ineligible loans.","required_facts":["Common ownership","Trust/Estate control","Beneficiary control","Fiduciary control","Power to control"],"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":"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":"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"}],"related_terms":[{"term":"Trust or Estate","url":"https://dealroom.so/glossary/trust-or-estate"},{"term":"Common Ownership","url":"https://dealroom.so/glossary/common-ownership"},{"term":"Pass-Through","url":"https://dealroom.so/glossary/pass-through"},{"term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"term":"Trust","url":"https://dealroom.so/glossary/trust"},{"term":"Common officer","url":"https://dealroom.so/glossary/common-officer"}],"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-ownership-through-a-trust-or-estate-create-affiliation-for-size-purposes","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."]}