{"ok":true,"canonical_url":"https://dealroom.so/glossary/third-party-equity-investments","api_url":"https://dealroom.so/api/public/glossary/third-party-equity-investments","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":"third-party-equity-investments","term":"Third-Party Equity Investments","group":"Your money in the deal","definition":"This is cash invested in your acquisition by someone other than you or the seller, like a family member or passive investor. These funds can count towards your minimum equity injection.","what_it_means":"For third-party equity to count towards your required injection, the SBA requires specific documentation, such as a gift letter or investment agreement. These funds must be unencumbered and cannot be repaid from the business's cash flow. Your lender will verify the source and ensure no disguised debt is involved.","url":"https://dealroom.so/glossary/third-party-equity-investments","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":"gift-letter","term":"Gift letter","url":"https://dealroom.so/glossary/gift-letter"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"},{"slug":"disguised-debt","term":"Disguised debt","url":"https://dealroom.so/glossary/disguised-debt"}],"related_questions":[{"question":"Can a third-party loan, not from the seller, count towards the minimum equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-third-party-loan-not-from-the-seller-count-towards-the-minimum-equity-injection"},{"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":"Can a borrower contribute a promissory note from a third party as part of their equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-contribute-a-promissory-note-from-a-third-party-as-part-of-their-equity-inj"},{"question":"Can a loan secured by non-business personal assets from a third party count as equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-loan-secured-by-non-business-personal-assets-from-a-third-party-count-as-equity-inje"},{"question":"How does a lender verify equity injection funds that are a cash gift from a non-family third party?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-a-cash-gift-from-a-non-family-thi"},{"question":"How should a lender verify an equity injection sourced from an unsecured personal loan from an unrelated third party?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-verify-an-equity-injection-sourced-from-an-unsecured-personal-loan-fro"}]},"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 — Third-Party Equity Investments","url":"https://dealroom.so/glossary/third-party-equity-investments","source_type":"DealRoom Data"}}