{"ok":true,"canonical_url":"https://dealroom.so/glossary/borrowed-funds","api_url":"https://dealroom.so/api/public/glossary/borrowed-funds","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"borrowed-funds","term":"Borrowed funds","group":"Your money in the deal","definition":"These are funds you've taken as a loan, often from a friend or relative, to contribute to your equity injection. The SBA has strict rules about using borrowed funds for your down payment.","what_it_means":"Borrowed funds are generally not allowed for the equity injection unless they are on full standby agreement and from a source not affiliated with the seller. If you use a Home equity line of credit (HELOC), it must be unencumbered from other liens.","url":"https://dealroom.so/glossary/borrowed-funds","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"home-equity-line-of-credit","term":"Home equity line of credit","url":"https://dealroom.so/glossary/home-equity-line-of-credit"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"}],"related_questions":[{"question":"Can personal funds borrowed against assets not being acquired count as my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-personal-funds-borrowed-against-assets-not-being-acquired-count-as-my-equity-injection"},{"question":"Can personal funds borrowed from a credit union against personal assets count towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-personal-funds-borrowed-from-a-credit-union-against-personal-assets-count-towards-my-e"},{"question":"What are the eligibility requirements for funds borrowed from a third party to count as equity injection?","url":"https://dealroom.so/sba-7a/questions/what-are-the-eligibility-requirements-for-funds-borrowed-from-a-third-party-to-count-as-eq"},{"question":"How do I show that my down payment funds actually belong to me and are not borrowed?","url":"https://dealroom.so/sba-loans/basics/how-do-i-show-that-my-down-payment-funds-actually-belong-to-me-and-are-not-borrowed"},{"question":"Can funds borrowed against my personal brokerage account be used for the SBA 7(a) equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-borrowed-against-my-personal-brokerage-account-be-used-for-the-sba-7-a-equity-in"},{"question":"Can I use borrowed funds from a personal unsecured loan for my equity injection if I commit to repaying it later?","url":"https://dealroom.so/sba-7a/questions/can-i-use-borrowed-funds-from-a-personal-unsecured-loan-for-my-equity-injection-if-i-commi"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Borrowed funds","url":"https://dealroom.so/glossary/borrowed-funds","source_type":"DealRoom Data"}}