Do affiliates count against SBA loan limits?
Short answer
Yes. SBA applies its loan maximums to you and all affiliates as if they were one business. The SBA guaranty cap is generally $3,750,000 for a borrower and its affiliates. Source: 13 CFR § 120.151.
Yes. Affiliation affects how much you can borrow as well as whether you are small. SBA's maximums apply to the applicant and all affiliates as if they were a single business. That is SOP 50 10 8.1, Sec. B, Ch. 1, Para. B.1.
The limits it touches
- The SBA guaranty cap is generally $3,750,000 for a borrower and its affiliates (13 CFR § 120.151).
- The SBA Express maximum of $500,000 is an aggregate across the applicant and its affiliates (Sec. B, Ch. 2, Para. B.1, p. 126).
- The 504 debenture limit of $5,000,000 is an outstanding balance limit that counts affiliates (Sec. C, Ch. 1, Para. D.1, p. 241).
What lenders must do
Lenders must determine whether the applicant has affiliates and document the results in their credit analysis. A loan to an Eligible Passive Company also applies to the limit of both that company and the Operating Company (§ 120.151).
An SBA official may request a determination of whether affiliation exists for these limits (Sec. A, Ch. 1, Para. D.3).
What Form 1919 asks
Question 3 asks whether the applicant or any owner owns any other business. If yes, you list each one with its tax ID and percentage of ownership.
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