{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-a-loan-from-a-non-owner-family-member-count-towards-equity-injection-if-on-full-standb","api_url":"https://dealroom.so/api/public/questions/can-a-loan-from-a-non-owner-family-member-count-towards-equity-injection-if-on-full-standb","question":"Can a loan from a non-owner family member count towards equity injection if on full standby?","topic":"Equity Injection Verification","audience":"lender","bot_mode":"lender","short_answer":"Yes, a loan from a non-owner family member can count towards equity injection if it is on full standby, unsecured, and has no repayment or interest for the life of the SBA loan.","rule":"SBA considers a loan from a non-owner family member as equity injection if it is structured as a full standby agreement. This means the family member cannot be repaid principal or interest until the SBA loan is paid in full, and the debt must be unsecured and fully subordinated to the SBA loan. This ensures the funds are truly 'at risk' within the business.","example":"A borrower receives a $50,000 loan from their sibling for equity. The lender requires a full standby agreement stating no principal or interest payments will be made until the $500,000 SBA loan is repaid. The agreement also specifies it's unsecured and subordinated.","what_lenders_check":"Lenders must ensure the standby agreement is legally binding, properly executed, and clearly meets all full standby requirements. This includes verifying the family member is not an owner and that the terms unequivocally subordinate their debt to the SBA loan, with no repayment or interest during the SBA loan's term.","required_facts":["Non-owner family member","Full standby agreement","Unsecured debt","No repayment/interest","Subordination"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"How does a lender verify equity injection funds originating from a newly established business bank account?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-originating-from-a-newly-established-busin"},{"question":"Can a borrower's investment in leasehold improvements prior to loan closing count towards the equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-leasehold-improvements-prior-to-loan-closing-count-towards-"},{"question":"What specific documentation is required to verify the source of gifted equity injection funds from a foreign family member?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-the-source-of-gifted-equity-injection-fu"},{"question":"If a borrower contributes equipment as equity, how does the lender verify its fair market value?","url":"https://dealroom.so/for-lenders/questions/if-a-borrower-contributes-equipment-as-equity-how-does-the-lender-verify-its-fair-market-v"},{"question":"What specific conditions must a personal loan from a non-owner family member meet to count as equity injection for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-must-a-personal-loan-from-a-non-owner-family-member-meet-to-count"},{"question":"How does a lender verify the source of gifted equity injection funds from a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-from-a-foreign-nation"}],"related_terms":[{"term":"Family member transaction","url":"https://dealroom.so/glossary/family-member-transaction"},{"term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Owner Equity","url":"https://dealroom.so/glossary/owner-equity"},{"term":"Equity Owner","url":"https://dealroom.so/glossary/equity-owner"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"}],"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-loan-from-a-non-owner-family-member-count-towards-equity-injection-if-on-full-standb","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."]}