For SBA lenders
Short answer
Affiliation for common management is triggered when one or more individuals control the management of both the applicant business and another business, or have the power to do so. This includes common officers, directors, or key employees.
SBA affiliation rules aim to prevent businesses from circumventing size standards by splitting into multiple entities. Common management affiliation exists when individuals exercise control over the day-to-day management or have the ability to influence key decisions of multiple businesses, regardless of ownership percentage. This applies to control through a management agreement or by being an officer, director, or managing member in more than one entity.
A borrower applies for a 7(a) loan. The lender discovers the borrower also serves as the CEO for another distinct company, and both entities operate in the same geographic market. The lender will review the management structure, operating agreements, and decision-making authority for both businesses to determine if common management results in affiliation for size standard 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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