For SBA lenders
Short answer
Beyond specific revenue or employee counts, a 'small business' for 7(a) eligibility must be for-profit, located in the U.S., not engaged in ineligible activities, and meet affiliation rules that combine entities under common control for size determination.
SBA size standards primarily rely on NAICS code-specific revenue or employee thresholds. However, a business must also meet other qualitative criteria: it must be operated for profit, be physically located and operate in the U.S., and not be engaged in specific ineligible activities (e.g., gambling, speculative real estate, passive businesses). Crucially, all affiliated businesses' revenues or employees are aggregated to determine if the combined entity is 'small.'
A borrower applies for a loan for a small restaurant with $1M in annual revenue, well below the NAICS code threshold. However, the lender discovers the borrower also owns 60% of another restaurant, and 40% of a food catering company. The lender must aggregate the revenues/employees of all three businesses, and if the combined entity exceeds the NAICS code size standard, the original restaurant is not 'small' for eligibility.
13 CFR Part 121 - Small Business Size Regulations
SBA Table of Size Standards
SOP 50 10 - Lender and Development Company Loan Programs
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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