{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi","api_url":"https://dealroom.so/api/public/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi","question":"Can a borrower's investment in a certificate of deposit (CD) count towards the required equity injection?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Yes, a borrower's investment in a certificate of deposit (CD) can count towards the equity injection if it is unencumbered and can be liquidated to cash prior to or at closing.","rule":"The SBA requires equity injection to be cash or unencumbered assets. A CD, while not immediately cash, is a liquid financial instrument. The lender must ensure the CD is solely owned by the borrower, not subject to any liens, and confirm that it can be cashed out at closing without penalty or delay, with the funds then used for the injection.","example":"A borrower holds a $75,000 CD. The lender would request the CD statement, verify it's unencumbered, and require the borrower to either cash it out before closing or assign it to the business/lender at closing as part of the injection funds.","what_lenders_check":"Lenders must confirm the CD's liquidity, ownership, and absence of encumbrances. They need to ensure that the funds from the CD will be available as cash for the injection at or before loan closing, requiring appropriate documentation of its liquidation or assignment.","required_facts":["CD ownership","Unencumbered status","Liquidation timing","Cash availability","Equity injection source"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"What documentation verifies funds for equity injection transferred from a personal investment account?","url":"https://dealroom.so/for-lenders/questions/what-documentation-verifies-funds-for-equity-injection-transferred-from-a-personal-investm"},{"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":"What specific documentation is required to verify equity injection funds originating from a borrower's existing business assets, such as equipment or inventory?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-equity-injection-funds-originating-from-"},{"question":"How does a lender verify the source of gifted equity injection funds when the donor is a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-when-the-donor-is-a-f"},{"question":"How does a lender verify equity injection funds that are sourced from a personal line of credit secured by non-personal real estate?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-sourced-from-a-personal-line-of-c"},{"question":"What are the specific requirements for a lender to document and verify an equity injection from a retirement account structured as a ROBS (Rollover for Business Startups) transaction?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-a-lender-to-document-and-verify-an-equity-injection"}],"related_terms":[{"term":"Certificate of Deposit","url":"https://dealroom.so/glossary/certificate-of-deposit"},{"term":"Equity Investment","url":"https://dealroom.so/glossary/equity-investment"},{"term":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"term":"Lender's Certificate","url":"https://dealroom.so/glossary/lender-s-certificate"},{"term":"Certificate of Title","url":"https://dealroom.so/glossary/certificate-of-title"},{"term":"Certificate of Naturalization","url":"https://dealroom.so/glossary/certificate-of-naturalization"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}