{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-i-include-inventory-as-part-of-my-equity-injection-if-it-s-new-and-purchased-with-my-c","api_url":"https://dealroom.so/api/public/questions/can-i-include-inventory-as-part-of-my-equity-injection-if-it-s-new-and-purchased-with-my-c","question":"Can I include inventory as part of my equity injection if it's new and purchased with my cash?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, new inventory purchased with your verifiable cash can count towards your equity injection, provided it is an eligible project cost.","rule":"SBA rules allow for certain non-cash assets to be included in the equity injection if they are directly related to the business acquisition and purchased with the buyer's unencumbered funds. New, clearly identifiable inventory that is part of the business's opening balance sheet and paid for by the buyer's cash would qualify, assuming proper documentation of purchase and value.","example":"A buyer is acquiring a new retail store, requiring a $100,000 equity injection. They purchase $15,000 worth of initial inventory with their personal cash before closing. This $15,000 can be counted as part of their equity injection, with invoices and proof of payment as documentation.","what_lenders_check":"Lenders verify that the inventory is truly new, purchased with the buyer's own funds (not borrowed), and essential to the business's operation. They require clear documentation of the purchase price and proof of payment to prevent inflated valuations or ineligible funds being used.","required_facts":["New inventory","Cash purchase","Eligible project cost","Documentation of value"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Form 1919 - Borrower Information Form"],"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":"SBA Form 1919 - Borrower Information Form","url":"https://www.sba.gov/sites/default/files/2025-03/2025.02.27%20Form%201919%20-%20Updates%20%28FINAL%29_03-12-2025%20%281%29.pdf"}],"related_questions":[{"question":"Can I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/can-i-use-retirement-funds-from-a-401-k-as-equity-injection-for-a-750-000-business-purchas"},{"question":"Can funds from a home equity line of credit (HELOC) be used as my equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-heloc-be-used-as-my-equity-injection-for-a-bus"},{"question":"Is it possible to use a second mortgage on my personal residence as an equity injection for a $1.5 million business acquisition?","url":"https://dealroom.so/sba-7a/questions/is-it-possible-to-use-a-second-mortgage-on-my-personal-residence-as-an-equity-injection-fo"},{"question":"How much cash must I personally inject for an SBA 7(a) business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-much-cash-must-i-personally-inject-for-an-sba-7-a-business-acquisition"},{"question":"What are the acceptable sources for my cash equity injection beyond personal savings?","url":"https://dealroom.so/sba-7a/questions/what-are-the-acceptable-sources-for-my-cash-equity-injection-beyond-personal-savings"},{"question":"What is the SBA's minimum required equity injection percentage for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"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"},{"term":"Equity injection verification","url":"https://dealroom.so/glossary/equity-injection-verification"},{"term":"Inventory","url":"https://dealroom.so/glossary/inventory"}],"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/sba-7a/questions/can-i-include-inventory-as-part-of-my-equity-injection-if-it-s-new-and-purchased-with-my-c","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."]}