For SBA lenders
Short answer
Two businesses with common ownership but distinct operations can avoid affiliation if no single owner or group of owners controls both entities, and there are no other factors establishing control, such as common management or contractual ties.
Affiliation rules focus on control, not just minority ownership. If no individual or entity has the power to control (typically 50% or more ownership or ability to block actions) both businesses, and there are no other indicia of control like shared management, facilities, or economic dependence, they may be considered independent for size determination.
Mr. Smith owns 30% of Company X and 30% of Company Y, with other unrelated individuals holding the remaining shares in each company. If there are no other factors of control (e.g., Mr. Smith is not CEO of both, nor do the companies share resources), Company X and Company Y would likely not be affiliated, and their revenues would not be combined for SBA size purposes.
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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