{"ok":true,"canonical_url":"https://dealroom.so/glossary/equity-credit","api_url":"https://dealroom.so/api/public/glossary/equity-credit","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":"equity-credit","term":"Equity credit","group":"Your money in the deal","definition":"This isn't a direct cash injection but refers to certain non-cash contributions a buyer can make towards their required equity injection for an SBA loan. It's less common for acquisitions.","what_it_means":"While not typical for acquisitions, equity credit might sometimes apply if you have specific assets like real estate or equipment that you contribute to the business at fair market value, which then becomes unencumbered business collateral. However, for most 7(a) acquisitions, the equity injection must be real cash, seasoned funds, or a seller note on full standby. Don't count on non-cash for your equity injection.","url":"https://dealroom.so/glossary/equity-credit","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"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":"seasoned-funds","term":"Seasoned funds","url":"https://dealroom.so/glossary/seasoned-funds"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"standby","term":"Standby","url":"https://dealroom.so/glossary/standby"}],"related_questions":[{"question":"Can funds from a home equity line of credit be used for my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-be-used-for-my-equity-injection"},{"question":"Can I use funds from a home equity line of credit for my 10% equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-home-equity-line-of-credit-for-my-10-equity-injection"},{"question":"Can funds from a home equity line of credit (HELOC) be used as my equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-heloc-be-used-as-my-equity-injection-for-a-bus"},{"question":"Can I use a secured personal line of credit as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-a-secured-personal-line-of-credit-as-part-of-my-equity-injection"},{"question":"Can I use funds from a personal credit card cash advance for my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-personal-credit-card-cash-advance-for-my-equity-injection"},{"question":"How does using funds from a home equity line of credit affect my down payment?","url":"https://dealroom.so/sba-7a/questions/how-does-using-funds-from-a-home-equity-line-of-credit-affect-my-down-payment"}]},"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 — Equity credit","url":"https://dealroom.so/glossary/equity-credit","source_type":"DealRoom Data"}}