{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-value-of-contributed-equipment-for-equity-injection-in-a-bus","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-evaluate-the-value-of-contributed-equipment-for-equity-injection-in-a-bus","question":"How does the SBA evaluate the value of contributed equipment for equity injection in a business acquisition?","topic":"Equity Injection Verification","audience":"lender","bot_mode":"lender","short_answer":"The SBA evaluates contributed equipment as equity injection based on its fair market value, which must be supported by an independent appraisal or other acceptable valuation method.","rule":"Non-cash equity injections, such as equipment, are acceptable if the assets are essential to the business and their value is properly substantiated. For equipment, this typically requires a current, independent appraisal to establish fair market value. The equipment must be transferred into the acquiring business entity.","example":"A borrower contributes specialized manufacturing equipment, valued at $75,000, as part of their equity injection for a $750,000 business acquisition. The lender requires an independent equipment appraisal to confirm the value and ensures the equipment is transferred to the acquiring business entity.","what_lenders_check":"Lenders are concerned about potential overvaluation of contributed assets. They must ensure the appraisal is credible, the equipment is truly essential to the business, and it is properly titled and free of prior liens upon contribution.","required_facts":["Contributed equipment","Fair market value","Independent appraisal","Equity injection","Asset essentiality"],"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":"How does a lender verify equity injection funds originating from a newly established business bank account?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-originating-from-a-newly-established-busin"},{"question":"Can a borrower's investment in leasehold improvements prior to loan closing count towards the equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-leasehold-improvements-prior-to-loan-closing-count-towards-"},{"question":"What specific documentation is required to verify the source of gifted equity injection funds from a foreign family member?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-the-source-of-gifted-equity-injection-fu"},{"question":"If a borrower contributes equipment as equity, how does the lender verify its fair market value?","url":"https://dealroom.so/for-lenders/questions/if-a-borrower-contributes-equipment-as-equity-how-does-the-lender-verify-its-fair-market-v"},{"question":"What specific conditions must a personal loan from a non-owner family member meet to count as equity injection for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-must-a-personal-loan-from-a-non-owner-family-member-meet-to-count"},{"question":"How does a lender verify the source of gifted equity injection funds from a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-from-a-foreign-nation"}],"related_terms":[{"term":"Contributed Equipment","url":"https://dealroom.so/glossary/contributed-equipment"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"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"},{"term":"Equity injection verification","url":"https://dealroom.so/glossary/equity-injection-verification"}],"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-the-sba-evaluate-the-value-of-contributed-equipment-for-equity-injection-in-a-bus","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."]}