Glossary · People and paperwork
Control principle
In short
This SBA rule defines who is considered an "owner" of a business based on their ability to control its operations. It impacts eligibility and who must personally guarantee the loan.
What it means in a deal
The control principle means anyone with 20% or more ownership, or the ability to prevent actions (a blocking right), is a key principal and must personal guarantee the loan. This includes individuals, trusts, and other entities. Understand all affiliation rules.
Official sources
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.
Related terms
Common questions about Control principle
- How does the "control" principle trigger affiliation for purposes of determining a business's size standard?
- How does the 'control' principle specifically trigger affiliation for purposes of determining a business's size standard?
- How does the SBA define 'total control' rule to determine affiliation for size standards?
- What is the definition of "control" for affiliation purposes in a 7(a) loan application?
- How does the SBA determine "common control" when assessing affiliation for a management company providing services?
- How does the SBA evaluate a franchise agreement not on the directory for acceptable franchisor control provisions?
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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