Glossary · Reading the business
Power to Control
In short
The ability of one entity or individual to direct the management and policies of another, even without majority ownership. The SBA uses this concept to determine affiliation, which can impact loan eligibility.
What it means in a deal
The SBA considers power to control a key factor in determining affiliation. This can arise from stock ownership (even less than 50% if it's the largest block), contractual rights (e.g., an option to purchase a controlling interest), or common management. If you or your affiliates have the power to control another business, that business's financials and employees might be counted towards SBA size standards.
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 Power to Control
- How does the SBA define 'total control' rule to determine affiliation for size standards?
- What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?
- 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?
- What specific limitations must a lender impose on a seller's post-closing consulting agreement to ensure it does not imply retained control or undue influence?
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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