{"ok":true,"canonical_url":"https://dealroom.so/glossary/unencumbered-cash","api_url":"https://dealroom.so/api/public/glossary/unencumbered-cash","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":"unencumbered-cash","term":"Unencumbered Cash","group":"Your money in the deal","definition":"Cash that is free from any liens, pledges, or restrictions. The SBA requires a buyer's equity injection to be unencumbered to ensure it's truly \"at risk.\"","what_it_means":"Your cash down payment must be verifiable as unencumbered. This means it can't be borrowed against other assets or subject to any claims. Lenders will require bank statements and potentially gift letters to confirm your funds are truly available and free of obligations.","url":"https://dealroom.so/glossary/unencumbered-cash","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"},{"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"}],"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":"proof-of-funds","term":"Proof of funds","url":"https://dealroom.so/glossary/proof-of-funds"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"}],"related_questions":[{"question":"How does the SBA define 'unencumbered cash' for equity injection purposes?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-define-unencumbered-cash-for-equity-injection-purposes"},{"question":"What exactly constitutes \"unencumbered liquid assets\" as a source for the required equity injection?","url":"https://dealroom.so/sba-7a/questions/what-exactly-constitutes-unencumbered-liquid-assets-as-a-source-for-the-required-equity-in"},{"question":"What if my equity injection includes funds from a personal loan secured by my unencumbered investment property?","url":"https://dealroom.so/sba-7a/questions/what-if-my-equity-injection-includes-funds-from-a-personal-loan-secured-by-my-unencumbered"},{"question":"What percentage of the equity injection must be unencumbered liquid assets for a $1,000,000 business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-percentage-of-the-equity-injection-must-be-unencumbered-liquid-assets-for-a-1-000-000"},{"question":"Can an equity injection be comprised of unencumbered business assets already owned by the borrower prior to the acquisition?","url":"https://dealroom.so/for-lenders/questions/can-an-equity-injection-be-comprised-of-unencumbered-business-assets-already-owned-by-the-"},{"question":"How does a lender verify equity injection funds originating from a personal loan secured by the borrower's unencumbered investment property?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-originating-from-a-personal-loan-secured-b"}]},"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 — Unencumbered Cash","url":"https://dealroom.so/glossary/unencumbered-cash","source_type":"DealRoom Data"}}