SBA 7(a) Q&A
Short answer
Affiliation is primarily determined by ownership, management, and contractual relationships, focusing on whether one entity has the power to control another. This includes common ownership, shared management, and identity of interest.
The SBA's size standards are crucial for 7(a) loan eligibility. Affiliation rules prevent a large business from using the program by splitting into smaller entities. The SBA looks at stock options, convertible securities, voting trusts, management agreements, and familial relationships to determine if combined entities exceed the size standard for their primary industry.
A buyer owns 60% of 'Business A' and seeks an SBA loan for 'Business B.' If 'Business A' and 'Business B' share a common management team, or if the buyer's family members own a significant portion of 'Business B,' the SBA may deem them affiliated. If their combined revenues exceed the size standard for the primary industry, 'Business B' would be ineligible.
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
SBA Table of Size Standards
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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