SBA size rules presume a violation under 13 CFR 121.103 (f). 1141j), are not considered affiliated with the cooperative by virtue of their membership in the cooperative. April 3, 2020 1. Affiliation under any of the circumstances described below is sufficient to establish affiliation for applicants for SBA's Business Loan, Disaster Loan, and Surety Bond Programs. The CARES Act refers to 13 CFR 121.103 whenever it refers to affiliate rules. ); and. The SBA has indicated that lenders are not required to make an independent determination regarding the applicability of affiliation rules under 13 CFR § 121.301 to borrowers. (1) In determining size, SBA considers stock options, convertible securities, and agreements to merge (including agreements in principle) to have a present effect on the power to control a concern. The SBA’s affiliation regulations for its various programs (except SBIR/ STTR/ Business Loans/ Disaster Loans, and Surety Bonds) are found at 13 CFR 121.103. The same two (or more) entities may create additional joint ventures, and each new joint venture entity may be awarded up to three contracts in accordance with this section. Thus, Firm B accounts for over 70% of Firm A's receipts. See 85 FR 20817 (April 15, 2020). Similarly, a protégé firm is not affiliated with its mentor solely because the protégé firm receives assistance from the mentor under a federal mentor-protégé program where an exception to affiliation is specifically authorized by statute or by SBA under the procedures set forth in § 121.903. At some point, however, such a longstanding inter-relationship or contractual dependence between the same joint venture partners will lead to a finding of general affiliation between and among them. (ii) Business concerns owned and controlled by Indian Tribes, ANCs, NHOs, CDCs, or wholly-owned entities of Indian Tribes, ANCs, NHOs, or CDCs, are not considered to be affiliated with other concerns owned by these entities because of their common ownership or common management. All aspects of the relationship between the prime and subcontractor are considered, including, but not limited to, the terms of the proposal (such as contract management, technical responsibilities, and the percentage of subcontracted work), agreements between the prime and subcontractor (such as bonding assistance or the teaming agreement), and whether the subcontractor is the incumbent contractor and is ineligible to submit a proposal because it exceeds the applicable size standard for that solicitation. This means that the joint venture must meet the requirements of §§ 124.513(c) and (d) in order to receive the exception to affiliation authorized by this paragraph. Having a mentor under SBA regulations allow the two companies to enter into a joint venture agreement while still avoiding tradition SBA affiliation rules. (7) For SBA's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, the bases for affiliation are set forth in §121.702. 414. In addition, the eligibility criteria set forth in 15 U.S.C. assist ance. B. in Employment and. h�b```f``R��� ���, �b80�($���!|.�8v+.^� da`X�����tW,��(` G This does not mean to imply that one or more representatives of a holding company or parent entity cannot also be involved in preparing an offer. (6) A firm that has an SBA-approved mentor-protégé agreement authorized under § 124.520 or § 125.9 of this chapter is not affiliated with its mentor firm solely because the protégé firm receives assistance from the mentor under the agreement. The Small Business Administration (SBA) is publishing this rule to rescind the regulations published on February 10, 2020, in the interim final rule (IFR) titled, ``Express Loan Programs; Affiliation Standards'' (Express IFR). If a faith-based organization indicates any relationship that may pertain to affiliation, such as ownership of, ownership by, or common management with any other organization, on or in connection with a loan application, and if the faith-based organization applying for a loan falls within the terms of the exemption described in paragraph (b)(10)(i) of this section with respect to that relationship, the faith-based organization may indicate on a separate sheet that it is entitled to the exemption. 501(c)); (v) Investment companies registered under the Investment Company Act of 1940, as amended (1940 Act) (15 U.S.C. (8) For applicants in SBA's Business Loan, Disaster Loan, and Surety Bond Guarantee Programs, the size standards and bases for affiliation are set forth in §121.301. (3) Control may be affirmative or negative. BLUF –Secular nonprofits are subject to standard SBA affiliation rules under 13 CFR 121.301(f); faith-based organizations are largely exempt from those rules. (i) Business concerns owned and controlled by Indian Tribes, Alaska Native Corporations (ANCs) organized pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. SBA Affiliation Regulations . The U.S. Small Business Administration (SBA) is issuing this guidance to specify the process by which SBA will review contracts entered into by loan applicants in SBA’s financial assistance programs for an affiliation exception under 13 CFR § 121.301(f)(4)(iv)(B) (effective March 11, 2020). financial assistance programs, excluding. § 121.103 How does SBA determine affiliation? the Surety Bond Guarantee. (1) Business concerns owned in whole or substantial part by investment companies licensed, or development companies qualifying, under the Small Business Investment Act of 1958, as amended, are not considered affiliates of such investment companies or development companies. This SBA regulation provides some general principles of affiliation but notes that for applicants in SBA’s Business Loan, Disaster Loan, and Surety Bond Guarantee Programs, the size standards and bases for affiliation are set forth in 13 CFR 121.301. Provisions of General Applicability, Employee Retirement Income Security Act of 1974. With the COVID-19 emergency, many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, tribal, and local public health measures that are being taken to minimize the public's exposure to the virus. financial. (g) Affiliation based on the newly organized concern rule. 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