{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-i-contribute-inventory-purchased-pre-closing-for-the-acquired-business-can-it-count-as-","api_url":"https://dealroom.so/api/public/questions/if-i-contribute-inventory-purchased-pre-closing-for-the-acquired-business-can-it-count-as-","question":"If I contribute inventory purchased pre-closing for the acquired business, can it count as equity?","topic":"What counts toward the 10%","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, new inventory purchased by the buyer immediately prior to closing and brought into the acquired business can count towards the equity injection, provided its value is verified and it wasn't purchased with borrowed funds from the transaction.","rule":"Tangible assets contributed by the buyer to the business can count as equity injection. For inventory, the value must be verifiable through invoices or an appraisal if significant. The lender will ensure these funds used to purchase the inventory were from eligible equity sources (e.g., personal savings, gift funds) and not from the SBA loan proceeds or other ineligible borrowed funds.","example":"You are acquiring a retail business for $700,000, requiring a $70,000 equity injection. You purchase $20,000 worth of new, relevant inventory from your personal savings a week before closing. This $20,000, supported by invoices, can count towards your $70,000 equity injection.","what_lenders_check":"Lenders verify the legitimacy, fair market value, and source of funds for the inventory. They ensure it is relevant to the business, properly valued, and not acquired with funds that would compromise the 'at risk' nature of the equity.","required_facts":["Inventory value","Proof of purchase","Source of funds for inventory","Relevance to business","Fair market value"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"Can renovation costs for an acquired business premises count towards my required 10% equity injection?","url":"https://dealroom.so/sba-7a/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-equity"},{"question":"Can the fair market value of equipment I already own and contribute to the acquired business count towards my equity?","url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-equipment-i-already-own-and-contribute-to-the-acquired-busine"},{"question":"Can sweat equity or future services I provide to the business count towards the required equity injection?","url":"https://dealroom.so/sba-7a/questions/can-sweat-equity-or-future-services-i-provide-to-the-business-count-towards-the-required-e"},{"question":"Are pre-closing legal and accounting fees eligible to be counted towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/are-pre-closing-legal-and-accounting-fees-eligible-to-be-counted-towards-my-equity-injecti"},{"question":"Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?","url":"https://dealroom.so/sba-7a/questions/besides-cash-what-non-cash-assets-can-i-contribute-to-meet-the-10-equity-injection-for-an-"},{"question":"Can a substantial pre-paid rent deposit on a commercial lease count towards the equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-substantial-pre-paid-rent-deposit-on-a-commercial-lease-count-towards-the-equity-inj"}],"related_terms":[{"term":"Pre-Closing","url":"https://dealroom.so/glossary/pre-closing"},{"term":"Pre-closing expenses","url":"https://dealroom.so/glossary/pre-closing-expenses"},{"term":"Inventory","url":"https://dealroom.so/glossary/inventory"},{"term":"Doing business as name","url":"https://dealroom.so/glossary/doing-business-as-name"},{"term":"For-profit business","url":"https://dealroom.so/glossary/for-profit-business"},{"term":"Alienate the Business","url":"https://dealroom.so/glossary/alienate-the-business"}],"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-inventory-purchased-pre-closing-for-the-acquired-business-can-it-count-as-","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."]}