{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-i-contribute-a-commercial-property-i-personally-own-as-equity-how-is-its-value-assessed","api_url":"https://dealroom.so/api/public/questions/if-i-contribute-a-commercial-property-i-personally-own-as-equity-how-is-its-value-assessed","question":"If I contribute a commercial property I personally own as equity, how is its value assessed for the injection?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"The value of personally-owned commercial real estate contributed as equity injection is assessed via an independent appraisal.","rule":"SBA rules permit unencumbered assets owned by the borrower, including real estate, to count towards the equity injection. The value must be established by an independent valuation, typically an appraisal, and cannot exceed its net book value or appraised value, whichever is lower. The lender must ensure no liens or encumbrances exist.","example":"A buyer needs a $100,000 equity injection. They contribute a personally owned commercial lot appraised at $75,000 and $25,000 in cash. The $75,000 appraisal value is used for the non-cash injection.","what_lenders_check":"Lenders will require a current, independent appraisal of the property and a title search to confirm it is unencumbered. They verify the property's relevance to the acquired business and proper documentation of its transfer.","required_facts":["Personal property","Commercial real estate","Independent appraisal","Unencumbered","Equity calculation"],"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":"Can I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/can-i-use-retirement-funds-from-a-401-k-as-equity-injection-for-a-750-000-business-purchas"},{"question":"Can funds from a home equity line of credit (HELOC) be used as my equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-heloc-be-used-as-my-equity-injection-for-a-bus"},{"question":"Is it possible to use a second mortgage on my personal residence as an equity injection for a $1.5 million business acquisition?","url":"https://dealroom.so/sba-7a/questions/is-it-possible-to-use-a-second-mortgage-on-my-personal-residence-as-an-equity-injection-fo"},{"question":"How much cash must I personally inject for an SBA 7(a) business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-much-cash-must-i-personally-inject-for-an-sba-7-a-business-acquisition"},{"question":"What are the acceptable sources for my cash equity injection beyond personal savings?","url":"https://dealroom.so/sba-7a/questions/what-are-the-acceptable-sources-for-my-cash-equity-injection-beyond-personal-savings"},{"question":"What is the SBA's minimum required equity injection percentage for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Personally Liable","url":"https://dealroom.so/glossary/personally-liable"},{"term":"Phase I ESA","url":"https://dealroom.so/glossary/phase-i-esa"},{"term":"Form I-551","url":"https://dealroom.so/glossary/form-i-551"},{"term":"Commercial vehicle","url":"https://dealroom.so/glossary/commercial-vehicle"},{"term":"Commercial Appraisal","url":"https://dealroom.so/glossary/commercial-appraisal"},{"term":"Commercial loan","url":"https://dealroom.so/glossary/commercial-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-i-contribute-a-commercial-property-i-personally-own-as-equity-how-is-its-value-assessed","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."]}