{"ok":true,"canonical_url":"https://dealroom.so/glossary/unencumbered-source","api_url":"https://dealroom.so/api/public/glossary/unencumbered-source","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-source","term":"Unencumbered Source","group":"Your money in the deal","definition":"This means funds or assets for your equity injection that are free and clear of any liens, pledges, or claims by other creditors. The SBA requires your injection to come from such sources.","what_it_means":"Your lender will require proof that your equity injection funds are from an unencumbered source, meaning they aren't borrowed against another asset or from a loan that requires repayment. This ensures you have true \"skin in the game.\" Provide bank statements or other documentation to verify.","url":"https://dealroom.so/glossary/unencumbered-source","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":"contributed-asset","term":"Contributed Asset","url":"https://dealroom.so/glossary/contributed-asset"},{"slug":"seasoned-funds","term":"Seasoned funds","url":"https://dealroom.so/glossary/seasoned-funds"},{"slug":"personal-financial-statement","term":"Personal financial statement","url":"https://dealroom.so/glossary/personal-financial-statement"}],"related_questions":[{"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":"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 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 Source","url":"https://dealroom.so/glossary/unencumbered-source","source_type":"DealRoom Data"}}