Glossary · Reading the business
In short
When the same individuals or entities own a significant stake in multiple businesses. This can trigger SBA affiliation rules, potentially impacting loan eligibility.
The SBA has strict affiliation rules to prevent large businesses from accessing small business loans. If you or your partners own 20% or more of another business, or have "negative control," the SBA might consider those businesses affiliated. This means their revenues/employees could be combined, potentially making your target business exceed size standards, rendering it ineligible.
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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