Glossary · People and paperwork
Managerial Control
In short
The power to direct the day-to-day operations and strategic decisions of a business. The SBA requires that the borrower, usually the buyer, has managerial control.
What it means in a deal
For a 7(a) loan, the buyer must demonstrate they will actively manage the business. This means the seller cannot retain significant decision-making authority after closing. Ensure your purchase agreement and related documents clearly transfer full managerial control to you.
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 Managerial Control
- 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 "control" principle trigger affiliation for purposes of determining a business's size standard?
- 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?
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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