{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-a-private-investor-provide-a-loan-that-counts-as-equity-injection-for-an-sba-7-a-loan","api_url":"https://dealroom.so/api/public/questions/can-a-private-investor-provide-a-loan-that-counts-as-equity-injection-for-an-sba-7-a-loan","question":"Can a private investor provide a loan that counts as equity injection for an SBA 7(a) loan?","topic":"Gift/Investor Funds","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, a subordinated loan from a private investor can count as equity injection, provided it meets the SBA's strict full standby requirements.","rule":"For a third-party loan to be considered equity, it must be on full standby, meaning no principal or interest payments can be made until the SBA loan is paid in full. The loan must also be unsecured or subordinated to the SBA's collateral position and must be documented with a specific standby agreement.","example":"A private investor lends you $100,000 for your business acquisition. If this loan is fully subordinated with no payments until the SBA 7(a) loan is repaid, it can contribute to your 10% equity injection for a $1,000,000 acquisition.","what_lenders_check":"Lenders must ensure the investor loan includes a legally binding, full standby agreement. They verify that the funds are truly at risk, cannot be withdrawn, and that the investor does not gain any control or equity that would violate SBA rules.","required_facts":["Full standby agreement","No principal/interest payments","Unsecured or subordinated","Verifiable funds"],"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":"Can I use gifted funds from a non-relative for my down payment?","url":"https://dealroom.so/sba-7a/questions/can-i-use-gifted-funds-from-a-non-relative-for-my-down-payment"}],"related_terms":[{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/can-a-private-investor-provide-a-loan-that-counts-as-equity-injection-for-an-sba-7-a-loan","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."]}