Glossary · Doing the deal
Control Agreement
In short
A legal agreement granting a secured party, usually a lender, control over a borrower's deposit accounts or investment property. It perfects the lender's security interest in these assets.
What it means in a deal
If the business has significant cash balances in bank accounts or marketable securities that are pledged as collateral, your SBA lender may require a Control Agreement. This ensures the lender has priority access to those funds in case of default. Understand that this gives the lender significant power over those specific assets.
Official sources
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.
Related terms
Common questions about Control Agreement
- How does the SBA evaluate a franchise agreement not on the directory for acceptable franchisor control provisions?
- What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?
- What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?
- How does a lender determine if a franchise agreement contains impermissible control provisions not listed on the Directory?
- How does the SBA determine 'undue control' by a franchisor in a franchise agreement, making it ineligible for 7(a) financing?
- How does the SBA determine if a franchise agreement grants the franchisor 'undue control' over the franchisee, impacting 7(a) eligibility?
Defined by CapBench 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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