{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/how-do-i-show-that-my-down-payment-funds-actually-belong-to-me-and-are-not-borrowed","api_url":"https://dealroom.so/api/public/questions/how-do-i-show-that-my-down-payment-funds-actually-belong-to-me-and-are-not-borrowed","question":"How do I show that my down payment funds actually belong to me and are not borrowed?","topic":"Down payment & equity injection","audience":"new","bot_mode":"buyer","short_answer":"You must provide clear documentation showing the source of your down payment funds, typically including bank statements, investment account statements, or a gift letter, to prove they are unencumbered and yours.","rule":"The SBA requires verification of the source of equity injection to ensure it represents true owner equity and not additional debt. Lenders must collect statements, transaction histories, and explanations for large deposits to confirm the funds' origin and that they are not sourced from another loan that would weaken the borrower's financial position.","example":"If you plan to use $100,000 from your savings account for the down payment, you would provide 3-6 months of bank statements to show the funds have been seasoned and are readily available, along with an explanation for any recent large deposits.","what_lenders_check":"Lenders meticulously trace the origin of equity funds. They look for red flags such as recent, unexplained large deposits or transfers, or evidence that the funds were borrowed, which could make the equity injection ineligible or reduce its value in their credit analysis.","required_facts":["Source verification","Bank statements","Unencumbered funds","No new debt","Gift letter (if applicable)"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Form 1919 - Borrower Information Form","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":"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"},{"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 I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Principal and Interest Payment","url":"https://dealroom.so/glossary/principal-and-interest-payment"},{"term":"Source and seasoning of funds","url":"https://dealroom.so/glossary/source-and-seasoning-of-funds"},{"term":"Phase I ESA","url":"https://dealroom.so/glossary/phase-i-esa"},{"term":"Form I-551","url":"https://dealroom.so/glossary/form-i-551"},{"term":"Not-for-Profit Business","url":"https://dealroom.so/glossary/not-for-profit-business"}],"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/how-do-i-show-that-my-down-payment-funds-actually-belong-to-me-and-are-not-borrowed","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."]}