{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-value-of-contributed-real-estate-for-equity-injection-purpose","api_url":"https://dealroom.so/api/public/questions/how-does-a-lender-verify-the-value-of-contributed-real-estate-for-equity-injection-purpose","question":"How does a lender verify the value of contributed real estate for equity injection purposes?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"A lender verifies the value of contributed real estate for equity injection purposes through a current independent appraisal conducted by a qualified appraiser, ensuring the valuation is accurate and meets SBA requirements.","rule":"When non-cash assets, such as real estate, are contributed as equity, their value must be objectively established. The SBA requires an independent appraisal for real estate to confirm its fair market value and to ensure that the equity injection is legitimate and properly valued.","example":"A borrower is injecting $150,000 of equity, which includes a parcel of land they own. The lender would require an independent appraisal of the land to determine its current fair market value. If the appraisal comes back at $120,000, only that amount can be counted towards the equity injection, requiring the borrower to provide the remaining $30,000 in cash.","what_lenders_check":"Lenders must ensure appraisals are from qualified, independent appraisers and adhere to USPAP standards. Overstating asset values for equity injection can lead to an artificially inflated equity position and is a common reason for guaranty repair or denial. Verifying clear title and any existing liens on the property is also essential.","required_facts":["Contributed real estate","Independent appraisal","Fair market value","Qualified appraiser","USPAP standards"],"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":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Equity in real estate","url":"https://dealroom.so/glossary/equity-in-real-estate"},{"term":"Real Estate","url":"https://dealroom.so/glossary/real-estate"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-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-the-value-of-contributed-real-estate-for-equity-injection-purpose","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."]}