For SBA lenders
Short answer
The 'control' principle triggers affiliation when one individual or entity possesses the power, directly or indirectly, to control another business, regardless of the percentage of ownership.
Control can be affirmative (e.g., majority ownership, management positions, contractual rights) or negative (e.g., veto power over critical decisions). The SBA assesses control through various means, including ownership, management, and contractual relationships, to determine if businesses are linked and should be combined for size standard testing.
Owner A owns 49% of Business X and Owner B owns 51%. Owner B also owns 100% of Business Y. Business X and Y are affiliated through common ownership and control by Owner B. Alternatively, if Owner A and B are spouses, even if A owns 49% of X and B owns 49% of Y (with others owning the rest), they could be affiliated by identity of interest if they exert control together.
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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