For SBA lenders
Short answer
Yes, the SBA generally considers unfunded agreements to acquire equity, such as stock options or convertible notes, when determining affiliation for size purposes, especially if conversion is imminent or within the control of the holder.
SBA affiliation rules are designed to aggregate all entities under common control to determine if a business is 'small.' Control can be actual or potential, and agreements to merge or acquire stock, including options, are considered if the party 'could' control the other business, even if not yet exercised.
An applicant business has a private equity firm that holds a warrant to acquire 30% of its stock. Even if the warrant is unfunded, the lender must analyze the terms to determine if the private equity firm's current or potential control triggers affiliation and requires aggregation of their revenues/employees for size testing.
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
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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