For SBA lenders
Short answer
"Control" for affiliation purposes includes the power to control, whether exercised or not, and can be through ownership, management, or contractual relationships.
The SBA considers control to exist if a person or entity has the power to exercise a controlling influence over the management or policies of another concern. This can be manifested through stock ownership (typically 50% or more, but less if no other single owner has a larger block), management positions, special voting rights, or various contractual agreements like management agreements or common interests.
Two businesses, "Alpha Corp" and "Beta LLC," are legally separate. However, John is CEO of Alpha and also holds 60% of Beta's voting shares. Even if Beta has its own management, John's 60% ownership means he controls Beta, triggering affiliation between Alpha and Beta for SBA size calculations.
Insider move
Lenders must meticulously review ownership structures, management agreements, and operational relationships to identify all potential affiliates. Misidentifying or overlooking affiliates can lead to a business exceeding SBA size standards and render the loan ineligible.
13 CFR Part 121 - Small Business Size Regulations
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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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