{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-equipment-i-already-own-be-used-as-equity-for-an-acquisition","api_url":"https://dealroom.so/api/public/questions/can-the-fair-market-value-of-equipment-i-already-own-be-used-as-equity-for-an-acquisition","question":"Can the fair market value of equipment I already own be used as equity for an acquisition?","topic":"What counts toward the 10%","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, the fair market value of unencumbered equipment you already own can sometimes be used as a non-cash equity injection for an SBA 7(a) acquisition, if it is essential to the acquired business.","rule":"Non-cash equity injections are permitted if the assets (like equipment) are valued by an independent third party, are essential to the business, and are unencumbered (meaning no liens against them). The value contributed must be supported by an appraisal or other acceptable valuation method.","example":"A buyer acquiring a printing business already owns a specialized printing press with a fair market value of $75,000. If this press is necessary for the acquired business's operations and is unencumbered, the $75,000 value can count towards the equity injection, subject to an independent appraisal.","what_lenders_check":"Lenders require an independent appraisal to determine the fair market value and verify that the equipment is free of liens. They also confirm that the equipment is truly essential to the operations of the acquired business and not merely an excess asset.","required_facts":["Owned equipment","Fair market value","Non-cash equity","Independent appraisal","Essential asset"],"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":[{"question":"Can renovation costs for an acquired business premises count towards my required 10% equity injection?","url":"https://dealroom.so/sba-7a/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-equity"},{"question":"Can the fair market value of equipment I already own and contribute to the acquired business count towards my equity?","url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-equipment-i-already-own-and-contribute-to-the-acquired-busine"},{"question":"Can sweat equity or future services I provide to the business count towards the required equity injection?","url":"https://dealroom.so/sba-7a/questions/can-sweat-equity-or-future-services-i-provide-to-the-business-count-towards-the-required-e"},{"question":"Are pre-closing legal and accounting fees eligible to be counted towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/are-pre-closing-legal-and-accounting-fees-eligible-to-be-counted-towards-my-equity-injecti"},{"question":"Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?","url":"https://dealroom.so/sba-7a/questions/besides-cash-what-non-cash-assets-can-i-contribute-to-meet-the-10-equity-injection-for-an-"},{"question":"Can a substantial pre-paid rent deposit on a commercial lease count towards the equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-substantial-pre-paid-rent-deposit-on-a-commercial-lease-count-towards-the-equity-inj"}],"related_terms":[{"term":"Fair market value","url":"https://dealroom.so/glossary/fair-market-value"},{"term":"Net fair market value","url":"https://dealroom.so/glossary/net-fair-market-value"},{"term":"Business Fair Market Value","url":"https://dealroom.so/glossary/business-fair-market-value"},{"term":"Lower of cost or fair market value","url":"https://dealroom.so/glossary/lower-of-cost-or-fair-market-value"},{"term":"Market value","url":"https://dealroom.so/glossary/market-value"},{"term":"Fair market rent","url":"https://dealroom.so/glossary/fair-market-rent"}],"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-the-fair-market-value-of-equipment-i-already-own-be-used-as-equity-for-an-acquisition","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."]}