{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/can-i-use-money-gifted-from-a-friend-for-my-down-payment","api_url":"https://dealroom.so/api/public/questions/can-i-use-money-gifted-from-a-friend-for-my-down-payment","question":"Can I use money gifted from a friend for my down payment?","topic":"Gifted Equity","audience":"new","bot_mode":"buyer","short_answer":"No, funds gifted from a friend cannot be used for your equity injection (down payment) for an SBA 7(a) loan. Gift funds must typically come from an immediate family member.","rule":"SBA rules are very specific about the source of equity injection to ensure it is truly 'at risk' capital. Gifts are generally only allowed from immediate family members, and a gift letter confirming it is not a disguised loan must be provided. Funds from friends are considered non-family and are not acceptable as equity.","example":"If a borrower receives $50,000 from their uncle for a down payment, with a signed gift letter stating no repayment is expected, this would generally be acceptable. However, if the same $50,000 came from a close personal friend, it would not count towards the required equity injection.","what_lenders_check":"Lenders rigorously verify the source of all equity injection funds, especially gifts. They require proof of the transfer of funds and a gift letter that explicitly states the funds are a gift with no repayment expected, ensuring compliance with SBA policy on acceptable equity sources.","required_facts":["Immediate family only","Not from friends","Gift letter required","No repayment expectation"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[],"related_terms":[{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Gifted Equity","url":"https://dealroom.so/glossary/gifted-equity"},{"term":"Demand for Payment","url":"https://dealroom.so/glossary/demand-for-payment"},{"term":"Gifted funds","url":"https://dealroom.so/glossary/gifted-funds"},{"term":"Money Laundering","url":"https://dealroom.so/glossary/money-laundering"},{"term":"Phase I ESA","url":"https://dealroom.so/glossary/phase-i-esa"}],"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-loans/basics/can-i-use-money-gifted-from-a-friend-for-my-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."]}