Glossary · Reading the business
size determination
In short
The SBA's process of evaluating if a business meets its "small business" definition, primarily based on revenue or employee count. This is a strict eligibility requirement for a 7(a) loan.
What it means in a deal
The SBA sets size standards by NAICS code. Your lender will perform a size determination, which includes evaluating potential affiliations. If the business, when combined with any affiliated entities, exceeds the revenue or employee threshold for its industry, it's ineligible for an SBA loan. Ensure all ownership and affiliation details are accurate.
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 size determination
- What constitutes 'common management' triggering affiliation for SBA 7(a) size determination?
- When does a prior contractual relationship create affiliation for 7(a) size determination?
- When does identity of interest trigger affiliation for size determination under SBA rules?
- How does ownership of options or warrants affect affiliation determination for SBA size standards?
- How do shared administrative services, like HR or accounting, automatically trigger affiliation for size determination?
- When does common management or shared facilities trigger affiliation for SBA 7(a) size determination?
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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