{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/if-i-contribute-real-estate-i-own-to-the-business-does-that-count-as-my-down-payment-for-a","api_url":"https://dealroom.so/api/public/questions/if-i-contribute-real-estate-i-own-to-the-business-does-that-count-as-my-down-payment-for-a","question":"If I contribute real estate I own to the business, does that count as my down payment for an SBA 7(a) loan?","topic":"Down payment & equity injection","audience":"new","bot_mode":"buyer","short_answer":"Yes, if you contribute real estate you personally own to the business, its fair market value can count as part of your equity injection (down payment) for an SBA 7(a) loan.","rule":"Non-cash assets, including real estate, can be included in the equity injection if properly valued and documented. The equity contribution is based on the appraised or fair market value of the asset at the time of injection, less any outstanding liens or encumbrances.","example":"A buyer is purchasing a business for $700,000 and needs a $70,000 equity injection. The buyer contributes $20,000 cash and transfers a personally owned commercial property, valued at $100,000 with a $50,000 mortgage, into the business. The net equity of $50,000 from the property (plus the $20,000 cash) satisfies the $70,000 injection.","what_lenders_check":"Lenders will require a formal appraisal to determine the fair market value of the real estate and verify that any existing liens are accounted for, ensuring the true net equity contributed is accurately calculated and documented.","required_facts":["Real estate contribution","Equity injection","Fair market value","Appraisal","Net equity"],"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 I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Business real estate","url":"https://dealroom.so/glossary/business-real-estate"},{"term":"Passive real estate business","url":"https://dealroom.so/glossary/passive-real-estate-business"},{"term":"Real Estate","url":"https://dealroom.so/glossary/real-estate"},{"term":"Owner-occupied business real estate","url":"https://dealroom.so/glossary/owner-occupied-business-real-estate"},{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Real estate entity","url":"https://dealroom.so/glossary/real-estate-entity"}],"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-loans/basics/if-i-contribute-real-estate-i-own-to-the-business-does-that-count-as-my-down-payment-for-a","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."]}