{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-an-existing-bank-account-of-the-acquired-business-count-towards-a-borrower-s-equity-in","api_url":"https://dealroom.so/api/public/questions/can-an-existing-bank-account-of-the-acquired-business-count-towards-a-borrower-s-equity-in","question":"Can an existing bank account of the acquired business count towards a borrower's equity injection?","topic":"Equity Injection Verification","audience":"lender","bot_mode":"lender","short_answer":"No, an existing bank account of the acquired business cannot count as a borrower's equity injection unless it can be explicitly documented as an injection of new cash funds from the borrower and not existing business assets.","rule":"Equity injection must represent new funds brought into the business by the borrower from eligible, unencumbered sources. Using existing cash of the acquired business would not represent a new equity infusion and is generally disallowed.","example":"A borrower is acquiring a business that has $20,000 cash in its operating account. The borrower needs to inject $50,000. The $20,000 cannot be counted. The borrower must bring in $50,000 of their own separate, new funds.","what_lenders_check":"Lenders must verify that equity injection funds are truly 'new money' from the borrower, not just existing assets of the business being acquired. This is a common mistake that can lead to guaranty issues.","required_facts":["Existing business cash","New funds required","Not borrower's injection","Unencumbered source"],"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":"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":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"term":"Lender's Transcript of Account","url":"https://dealroom.so/glossary/lender-s-transcript-of-account"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-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-an-existing-bank-account-of-the-acquired-business-count-towards-a-borrower-s-equity-in","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."]}