For SBA lenders
Short answer
A contractual relationship triggers affiliation when one business has the power to control the other through agreements, such as management agreements, franchise agreements (not on SBA directory), or exclusive supply contracts.
Affiliation exists when one business controls or has the power to control another, or a third party controls both. Contractual affiliation can arise from agreements that grant disproportionate control, like an agreement allowing one business to manage the operations of another, or exclusive agreements that significantly restrict a business's operational independence.
Company A has a management agreement with Company B, giving Company A final decision-making authority over Company B's operational, financial, and personnel matters. This contractual relationship would trigger affiliation between A and B, requiring their revenues/employees to be aggregated for size standards.
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.
More on affiliation & size
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