{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-documentation-is-required-to-verify-equity-injection-from-the-sale-of-a-borrower-s-pe","api_url":"https://dealroom.so/api/public/questions/what-documentation-is-required-to-verify-equity-injection-from-the-sale-of-a-borrower-s-pe","question":"What documentation is required to verify equity injection from the sale of a borrower's personal real estate?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Lenders require the HUD-1 settlement statement (or equivalent), the recorded deed, bank statements showing the deposit of net sale proceeds, and proof of any prior lien satisfaction.","rule":"To verify equity injection from the sale of personal real estate, the lender must confirm the legitimate sale of the property. This involves reviewing the closing documents (HUD-1 or similar), the recorded deed confirming the transfer of ownership, and bank statements showing the net proceeds from the sale deposited into the borrower's account, then subsequently transferred as equity. Any prior mortgage satisfaction must also be evident.","example":"A borrower uses $150,000 from the sale of their vacation home for an equity injection. The lender requests the HUD-1 from the sale, the recorded deed, and bank statements showing the $150,000 net proceeds deposited and subsequently transferred to the business's account.","what_lenders_check":"Lenders must ensure the real estate sale was an arm's-length transaction and that the funds are truly unencumbered equity, not a disguised loan or subject to future claims. Thorough documentation of the sale and fund tracing is crucial for SBA guaranty integrity.","required_facts":["HUD-1 statement","Recorded deed","Bank statements","Net sale proceeds","Lien satisfaction"],"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":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity"},{"term":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-equity-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-documentation-is-required-to-verify-equity-injection-from-the-sale-of-a-borrower-s-pe","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."]}