Glossary · People and paperwork
Familial relationship
In short
This refers to family ties between individuals involved in the business acquisition. The SBA has rules around familial relationships to prevent conflicts of interest, especially regarding seller notes or gifts.
What it means in a deal
If the seller has a familial relationship with the buyer, the seller note cannot be on standby and must be repaid on the same terms as the bank loan. Any genuine gift for your equity injection must also be from an immediate family member.
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 Familial relationship
- When does familial relationship between owners of separate businesses trigger affiliation for size?
- Does a shared familial relationship between business owners automatically trigger affiliation for SBA size standard calculations?
- When does a shared familial relationship between business owners automatically trigger affiliation for SBA size standard calculations?
- When does a prior contractual relationship create affiliation for 7(a) size determination?
- When does a contractual relationship between two businesses trigger affiliation for size standard calculations?
- Are there specific restrictions on the relationship of a non-family gift donor for equity injection?
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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