{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-a-non-family-investor-provides-funds-as-a-loan-not-equity-can-it-count-towards-my-equit","api_url":"https://dealroom.so/api/public/questions/if-a-non-family-investor-provides-funds-as-a-loan-not-equity-can-it-count-towards-my-equit","question":"If a non-family investor provides funds as a loan, not equity, can it count towards my equity injection?","topic":"Gift/investor funds","audience":"borrower","bot_mode":"buyer","short_answer":"No, if a non-family investor provides funds as a loan, it cannot count towards your equity injection unless that loan is on full standby and meets strict subordination requirements.","rule":"For any borrowed funds, including those from an investor, to count as equity injection, they must be on 'full standby.' This means no principal or interest payments can be made until the SBA loan is fully repaid, and the loan must be fully subordinate to the SBA loan regarding all assets. Without full standby, it's considered debt, not equity.","example":"A buyer needs a $100,000 equity injection. A friend invests $50,000 as a 5-year loan with monthly interest payments. Since this loan is not on full standby, it cannot count towards the buyer's equity injection, and the buyer still needs to provide $100,000 from unencumbered sources.","what_lenders_check":"Lenders will meticulously review any investor funds to determine if they are equity or debt. If debt, they will require a full standby agreement with clear subordination, and if not fully subordinate, it won't count as equity injection.","required_facts":["Non-family investor","Investor loan","Equity injection","Full standby","Subordination","Debt vs Equity"],"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 can a gift from a close family member contribute to my equity injection for a $600,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/how-can-a-gift-from-a-close-family-member-contribute-to-my-equity-injection-for-a-600-000-"},{"question":"If my parents gift me $50,000 for a down payment, what specific documentation is required by the SBA?","url":"https://dealroom.so/sba-7a/questions/if-my-parents-gift-me-50-000-for-a-down-payment-what-specific-documentation-is-required-by"},{"question":"Can a corporate entity, not an individual, provide a gift that counts towards my equity injection for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-a-corporate-entity-not-an-individual-provide-a-gift-that-counts-towards-my-equity-inje"},{"question":"Can a gift from a non-family investor count towards my SBA 7(a) equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-gift-from-a-non-family-investor-count-towards-my-sba-7-a-equity-injection"},{"question":"Can a non-profit organization provide a grant that counts towards my equity injection for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-a-non-profit-organization-provide-a-grant-that-counts-towards-my-equity-injection-for-"},{"question":"Can a gift from a non-family friend for $50,000 be used for my equity injection on an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-a-gift-from-a-non-family-friend-for-50-000-be-used-for-my-equity-injection-on-an-sba-7"}],"related_terms":[{"term":"Non-Owner Investor","url":"https://dealroom.so/glossary/non-owner-investor"},{"term":"Investor","url":"https://dealroom.so/glossary/investor"},{"term":"Non-cash equity","url":"https://dealroom.so/glossary/non-cash-equity"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"term":"Non-guaranteed loan","url":"https://dealroom.so/glossary/non-guaranteed-loan"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/if-a-non-family-investor-provides-funds-as-a-loan-not-equity-can-it-count-towards-my-equit","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."]}