{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-requirements-for-verifying-a-borrower-s-equity-injection-when-it-consists-of-","api_url":"https://dealroom.so/api/public/questions/what-are-the-requirements-for-verifying-a-borrower-s-equity-injection-when-it-consists-of-","question":"What are the requirements for verifying a borrower's equity injection when it consists of cash from personal savings accounts?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Lenders must verify the source and seasoning of cash equity injections. Funds must be unencumbered and typically sourced from liquid assets held by the borrower for at least 90 days.","rule":"The SBA requires lenders to verify that the equity injection is from eligible sources and is truly 'at risk' in the business. This means funds should generally be seasoned (held in the borrower's account for at least 90 days) to demonstrate genuine liquidity and prevent circular financing. If unseasoned, the source must be clearly documented.","example":"A borrower contributes $100,000 cash. The lender would obtain 3-6 months of personal bank statements showing the funds in the account and no recent large deposits from an unverified source or debt. If a large, unseasoned deposit occurred, the lender would require documentation for that deposit (e.g., sale of a personal asset).","what_lenders_check":"Lenders are concerned about verifying the legitimacy of the source of funds to prevent fraud, ensure the injection is truly unencumbered cash, and confirm the borrower has sufficient 'skin in the game.'","required_facts":["Cash injection","Personal savings","Source verification","Funds seasoning","Unencumbered"],"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":"What documentation verifies funds for equity injection transferred from a personal investment account?","url":"https://dealroom.so/for-lenders/questions/what-documentation-verifies-funds-for-equity-injection-transferred-from-a-personal-investm"},{"question":"How does a lender verify equity injection funds that are a cash gift from a non-family third party?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-a-cash-gift-from-a-non-family-thi"},{"question":"Can a borrower's investment in a certificate of deposit (CD) count towards the required equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi"},{"question":"What specific documentation is required to verify equity injection funds originating from a borrower's existing business assets, such as equipment or inventory?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-equity-injection-funds-originating-from-"},{"question":"How does a lender verify the source of gifted equity injection funds when the donor is a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-when-the-donor-is-a-f"},{"question":"How does a lender verify equity injection funds that are sourced from a personal line of credit secured by non-personal real estate?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-sourced-from-a-personal-line-of-c"}],"related_terms":[{"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":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"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":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/what-are-the-requirements-for-verifying-a-borrower-s-equity-injection-when-it-consists-of-","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."]}