{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/is-my-equity-injection-down-payment-always-required-to-be-cash","api_url":"https://dealroom.so/api/public/questions/is-my-equity-injection-down-payment-always-required-to-be-cash","question":"Is my equity injection (down payment) always required to be cash?","topic":"Down payment & Equity injection","audience":"new","bot_mode":"buyer","short_answer":"No, your equity injection doesn't always have to be entirely cash; it can include certain tangible assets or a standby seller note, provided specific SBA rules are met.","rule":"While cash is common, the SBA allows for certain non-cash injections, such as appraised, unencumbered business assets or a seller's note that is on full standby (no payments for the life of the SBA loan). These options must be carefully structured and documented.","example":"For a $100,000 equity injection, a buyer might contribute $70,000 cash and an unencumbered piece of equipment valued at $30,000, or a $30,000 seller note on full standby.","what_lenders_check":"Lenders rigorously verify the source and form of the equity injection to ensure it complies with SBA requirements, especially for non-cash contributions or seller notes, which carry specific restrictions to maintain the borrower's true equity.","required_facts":["Cash Not Required","Tangible Assets","Standby Seller Note","Unencumbered Assets","SBA Rules"],"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 a credit card cash advance be used for my down payment?","url":"https://dealroom.so/sba-loans/basics/can-a-credit-card-cash-advance-be-used-for-my-down-payment"},{"question":"What documentation is needed if my equity injection comes from a personal gift?","url":"https://dealroom.so/sba-loans/basics/what-documentation-is-needed-if-my-equity-injection-comes-from-a-personal-gift"}],"related_terms":[{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"term":"Cash injection","url":"https://dealroom.so/glossary/cash-injection"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Cash equity","url":"https://dealroom.so/glossary/cash-equity"},{"term":"Minimum cash injection","url":"https://dealroom.so/glossary/minimum-cash-injection"}],"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/is-my-equity-injection-down-payment-always-required-to-be-cash","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."]}