For SBA lenders
Short answer
Affiliation is triggered when common management (e.g., shared directors, officers, or key employees) exists between two or more entities, giving one the power to control the other.
The SBA considers entities affiliated if they share common management, meaning that one or more individuals who control the management of one concern also control the management of another. This 'common management' rule can apply even without direct ownership, based on the ability to direct operations or influence decisions.
Mr. Smith is the CEO of Company A, an applicant for a 7(a) loan. He is also on the Board of Directors and actively involved in operations for Company B, a separate legal entity. The lender would likely find Company A and Company B affiliated due to common management.
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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