{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-i-use-an-equity-injection-from-another-company-i-own-for-the-down-payment","api_url":"https://dealroom.so/api/public/questions/can-i-use-an-equity-injection-from-another-company-i-own-for-the-down-payment","question":"Can I use an equity injection from another company I own for the down payment?","topic":"Equity Injection","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, funds from an existing business you own can count as equity injection, provided the source business is financially sound and the transaction is well-documented.","rule":"Equity injection can come from various verifiable sources, including funds from another business owned by the borrower. The lender must ensure the contributing business has sufficient liquidity and that the transfer of funds does not negatively impact its own financial stability.","example":"If you own a separate profitable business with $150,000 in excess cash, you could transfer $100,000 from that business's bank account to the new acquisition's operating account to serve as part of your required equity injection.","what_lenders_check":"Lenders verify the financial health of the contributing business to ensure the equity injection does not create undue hardship or jeopardize its operations. They require clear documentation of the transfer.","required_facts":["Contributing business financial health","Verifiable transfer","Adequate liquidity"],"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 is needed to verify cash equity injection from a business's operating account prior to the 7(a) loan closing?","url":"https://dealroom.so/sba-7a/questions/what-documentation-is-needed-to-verify-cash-equity-injection-from-a-business-s-operating-a"},{"question":"How does the SBA typically view a borrower's investment of an existing personal vehicle as equity injection for an acquisition?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-typically-view-a-borrower-s-investment-of-an-existing-personal-vehicle-as"},{"question":"Can funds from an investor who will own less than 20% of the business count towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-an-investor-who-will-own-less-than-20-of-the-business-count-towards-my-equi"},{"question":"What happens if I receive a large inheritance just before my loan closing?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-i-receive-a-large-inheritance-just-before-my-loan-closing"},{"question":"Can funds from a private equity firm count as equity injection for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-private-equity-firm-count-as-equity-injection-for-an-sba-7-a-loan"},{"question":"What documentation is needed to verify equity injection from funds held in a foreign bank account?","url":"https://dealroom.so/sba-7a/questions/what-documentation-is-needed-to-verify-equity-injection-from-funds-held-in-a-foreign-bank-"}],"related_terms":[{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Demand for Payment","url":"https://dealroom.so/glossary/demand-for-payment"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-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":"2026-06-14","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-i-use-an-equity-injection-from-another-company-i-own-for-the-down-payment","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."]}