{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-from-a-borrower-s-personal-credit-card-cash-adva","api_url":"https://dealroom.so/api/public/questions/how-does-a-lender-verify-equity-injection-from-a-borrower-s-personal-credit-card-cash-adva","question":"How does a lender verify equity injection from a borrower's personal credit card cash advance?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Equity injection from a personal credit card cash advance is generally not acceptable, as it is considered borrowed funds and typically requires repayment, failing the 'unencumbered' requirement.","rule":"SBA policy requires that equity injection funds be from unencumbered personal resources. Funds borrowed from any source, including personal credit cards or lines of credit, are generally not considered true equity unless the underlying debt is fully subordinated to the SBA loan and on 'full standby' with no repayment until the SBA loan is repaid. This is rarely feasible for credit card advances.","example":"A borrower presents bank statements showing a $20,000 deposit labeled 'credit card cash advance' as part of their equity. The lender must advise that these funds are ineligible because they are borrowed, encumbered, and require repayment.","what_lenders_check":"Lenders must strictly scrutinize the source of equity injection to ensure it meets SBA's 'unencumbered' requirement. Accepting borrowed funds as equity without proper subordination can lead to a guaranty repair or denial.","required_facts":["Credit card cash advance","Borrowed funds","Unencumbered requirement","Repayment obligation","Equity eligibility"],"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 verifies funds for equity injection transferred from a personal investment account?","url":"https://dealroom.so/for-lenders/questions/what-documentation-verifies-funds-for-equity-injection-transferred-from-a-personal-investm"},{"question":"How does a lender verify equity injection funds that are a cash gift from a non-family third party?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-a-cash-gift-from-a-non-family-thi"},{"question":"Can a borrower's investment in a certificate of deposit (CD) count towards the required equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi"},{"question":"What specific documentation is required to verify equity injection funds originating from a borrower's existing business assets, such as equipment or inventory?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-equity-injection-funds-originating-from-"},{"question":"How does a lender verify the source of gifted equity injection funds when the donor is a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-when-the-donor-is-a-f"},{"question":"How does a lender verify equity injection funds that are sourced from a personal line of credit secured by non-personal real estate?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-sourced-from-a-personal-line-of-c"}],"related_terms":[{"term":"Cash Advance","url":"https://dealroom.so/glossary/cash-advance"},{"term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"term":"Cash injection","url":"https://dealroom.so/glossary/cash-injection"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"term":"Lender's Credit Authority","url":"https://dealroom.so/glossary/lender-s-credit-authority"}],"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/for-lenders/questions/how-does-a-lender-verify-equity-injection-from-a-borrower-s-personal-credit-card-cash-adva","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."]}