{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-and-control-of-borrower-s-equity-injection-funds-from-","api_url":"https://dealroom.so/api/public/questions/how-does-a-lender-verify-the-source-and-control-of-borrower-s-equity-injection-funds-from-","question":"How does a lender verify the source and control of borrower's equity injection funds from a newly established business bank account?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"A lender verifies funds from a newly established business bank account by tracing the funds' origin from the borrower's personal accounts or other eligible sources and confirming the funds are unencumbered.","rule":"The SBA requires verification of the source and sufficiency of the equity injection. For funds in a new business account, the lender must look back to the original source (e.g., personal savings, sale of assets, gift) to ensure they are properly sourced, unencumbered, and genuinely represent the borrower's contribution.","example":"A borrower shows $100,000 in a new business checking account for equity injection. The lender requests bank statements from the borrower's personal savings account showing a transfer of $100,000 to the business account, along with prior statements confirming the funds were seasoned and unencumbered.","what_lenders_check":"Lenders must prevent ineligible equity injections (e.g., borrowed funds without proper subordination) by rigorously tracing funds in new business accounts back to their legitimate, unencumbered source.","required_facts":["Equity injection","Business bank account","Fund source","Unencumbered funds","Verification"],"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":"Source and seasoning of funds","url":"https://dealroom.so/glossary/source-and-seasoning-of-funds"},{"term":"Source of funds","url":"https://dealroom.so/glossary/source-of-funds"},{"term":"Source-of-Funds Verification","url":"https://dealroom.so/glossary/source-of-funds-verification"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"term":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"}],"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-the-source-and-control-of-borrower-s-equity-injection-funds-from-","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."]}