{"ok":true,"canonical_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","api_url":"https://dealroom.so/api/public/questions/how-does-a-lender-verify-equity-injection-funds-that-are-a-cash-gift-from-a-non-family-thi","question":"How does a lender verify equity injection funds that are a cash gift from a non-family third party?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Cash gifts from non-family third parties are generally not permitted for equity injection unless they meet specific, limited criteria and are fully documented to ensure no repayment obligation.","rule":"While gifts from immediate family members are allowed with specific documentation (gift letter, source of funds), gifts from unrelated third parties are highly scrutinized and generally disallowed by the SBA for equity injection. If accepted under rare circumstances (e.g., grant from an economic development agency), the lender must verify it is an irrevocable gift with no repayment terms, and the donor's source of funds must be documented.","example":"A local economic development agency provides a $50,000 grant to a business owner for startup costs. The lender would require an official grant letter, proof of the agency's funding, and verification that no repayment is expected from the borrower.","what_lenders_check":"Lenders are highly cautious with non-family gifts, as they can represent disguised debt or undisclosed affiliation. They must strictly verify the irrevocable nature of the gift and thoroughly investigate the donor's source of funds to prevent eligibility issues.","required_facts":["Non-family donor","Irrevocable gift","No repayment terms","Donor source of funds","Gift letter"],"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":"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":"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"},{"question":"What are the specific requirements for a lender to document and verify an equity injection from a retirement account structured as a ROBS (Rollover for Business Startups) transaction?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-a-lender-to-document-and-verify-an-equity-injection"}],"related_terms":[{"term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"term":"Non-cash equity","url":"https://dealroom.so/glossary/non-cash-equity"},{"term":"Gift funds","url":"https://dealroom.so/glossary/gift-funds"},{"term":"Cash Gift","url":"https://dealroom.so/glossary/cash-gift"},{"term":"Cash injection","url":"https://dealroom.so/glossary/cash-injection"},{"term":"Equity injection","url":"https://dealroom.so/glossary/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":"2026-06-13","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-funds-that-are-a-cash-gift-from-a-non-family-thi","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."]}