For SBA lenders
Short answer
Affiliation through common management occurs when individuals, firms, or entities direct or have the power to direct the management of two or more businesses, even without majority ownership.
The SBA's affiliation rules extend beyond direct ownership to include common management. If the same individual or group of individuals manages the day-to-day operations or has the power to make key policy decisions for multiple businesses, those businesses are considered affiliated for size standard purposes.
A lender is underwriting a $1M 7(a) loan for 'Biz A'. The owner of 'Biz A' also serves as the CEO of 'Biz B', a separate legal entity, and makes all strategic decisions for both. Despite no ownership overlap, the common management structure triggers affiliation, requiring the lender to combine the revenues of 'Biz A' and 'Biz B' to determine size eligibility.
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
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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