{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-a-personal-loan-from-a-non-owner-family-member-count-as-equity-if-fully-subordinated-t","api_url":"https://dealroom.so/api/public/questions/can-a-personal-loan-from-a-non-owner-family-member-count-as-equity-if-fully-subordinated-t","question":"Can a personal loan from a non-owner family member count as equity if fully subordinated to the 7(a) loan?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Yes, a personal loan from a non-owner family member can count as equity if it is on full standby, unsecured, and evidenced by a subordination agreement acceptable to the SBA.","rule":"For a loan from an eligible third party (including a non-owner family member) to count as equity injection, it must be on full standby for the life of the SBA loan, meaning no payments of principal or interest can be made. It must also be unsecured and fully subordinated to the SBA loan, and the terms must be documented in a standby agreement.","example":"A borrower receives a $75,000 loan from their sibling for equity. For this to count, the lender requires a promissory note and a full standby agreement, stating no payments will be made until the SBA loan is paid in full, and it must be unsecured.","what_lenders_check":"Lenders must ensure all standby requirements are met, including proper documentation and a clear understanding that the funds are truly at risk as equity. Any deviation could result in the funds not being counted as equity.","required_facts":["Family loan","Non-owner","Full standby","Subordination agreement","Unsecured"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"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"}],"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":"Can a borrower's investment in a certificate of deposit (CD) count towards the required equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi"},{"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"}],"related_terms":[{"term":"Fully subordinated","url":"https://dealroom.so/glossary/fully-subordinated"},{"term":"Family member transaction","url":"https://dealroom.so/glossary/family-member-transaction"},{"term":"Fully subordinated note","url":"https://dealroom.so/glossary/fully-subordinated-note"},{"term":"Fully Subordinated Debt","url":"https://dealroom.so/glossary/fully-subordinated-debt"},{"term":"Owner Equity","url":"https://dealroom.so/glossary/owner-equity"},{"term":"Equity Owner","url":"https://dealroom.so/glossary/equity-owner"}],"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-personal-loan-from-a-non-owner-family-member-count-as-equity-if-fully-subordinated-t","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."]}