Glossary · Reading the business
In short
The relationship between two or more businesses where one controls or has the power to control the other, or a third party controls both. The SBA uses strict affiliation rules to determine if a business is 'small' and eligible for a 7(a) loan.
The SBA aggregates revenues and employees of affiliated businesses to determine if the borrower meets size standards. Common affiliation triggers include ownership, management, and contractual relationships like franchise agreements. You must disclose all potential affiliations to your lender; misrepresenting this can jeopardize your loan.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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