{"ok":true,"canonical_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","api_url":"https://dealroom.so/api/public/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 the source of gifted equity injection funds when the donor is a foreign national?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"When a foreign national provides gifted equity injection funds, the lender must obtain a gift letter, evidence of the donor's ability to give, and documentation tracing the funds from the donor's foreign account to the borrower's U.S. account. Enhanced due diligence is required to comply with AML/BSA regulations.","rule":"SBA policy allows gifted funds for equity injection, but the source must be verifiable and legitimate. When the donor is a foreign national, lenders must perform enhanced due diligence to ensure compliance with Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) regulations. This includes obtaining a gift letter, verifying the donor's identity, obtaining bank statements from the donor's foreign account showing fund availability, and tracing the transfer of funds through established financial institutions to the borrower's U.S. account. The lender must ensure the funds are not from an ineligible source or illegal activity.","example":"A borrower receives a $75,000 gift from a relative in Canada for equity injection. The lender requires a gift letter, the relative's bank statements showing the funds, and bank wire transfer records demonstrating the funds moved directly from the relative's Canadian bank to the borrower's U.S. business account, along with an explanation of the relationship.","what_lenders_check":"Lenders face increased risk with foreign-sourced funds due to AML/BSA compliance and fraud. Insufficient verification or inability to trace funds from a foreign donor can lead to rejection of the equity injection and potential guaranty denial.","required_facts":["Gifted funds","Foreign national donor","Source verification","AML/BSA compliance","Fund tracing documentation"],"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 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":"Gifted funds","url":"https://dealroom.so/glossary/gifted-funds"},{"term":"Source of funds","url":"https://dealroom.so/glossary/source-of-funds"},{"term":"Gifted Equity","url":"https://dealroom.so/glossary/gifted-equity"},{"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":"Source and seasoning of funds","url":"https://dealroom.so/glossary/source-and-seasoning-of-funds"}],"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-of-gifted-equity-injection-funds-when-the-donor-is-a-f","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."]}