For SBA lenders
Short answer
A prior contractual relationship can create affiliation if it establishes the power of one entity to control the other or creates economic dependence, even if the contract is terminated.
Affiliation can arise from present or past contractual relationships where one party gained the power to control the other, or where there is such economic dependence that the parties are effectively not separate. For instance, if a large contractor previously had an exclusive, long-term contract with a smaller subcontractor that gave the large contractor significant control over the smaller one's operations, this could trigger affiliation.
Company A previously had an exclusive contract with Company B, where Company A dictated pricing, production, and sales for Company B for five years. Even if this contract has ended, the historical dominance could lead to an SBA finding of affiliation if there are lingering control elements or significant economic dependence, requiring both companies' financials to be combined for size standards.
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 2026-06-13. 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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