{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-documentation-verifies-equity-injection-funds-deposited-as-cash-into-a-borrower-s-per","api_url":"https://dealroom.so/api/public/questions/what-documentation-verifies-equity-injection-funds-deposited-as-cash-into-a-borrower-s-per","question":"What documentation verifies equity injection funds deposited as cash into a borrower's personal account over several months?","topic":"Equity Injection Verification","audience":"lender","bot_mode":"lender","short_answer":"Verifying cash deposits requires detailed documentation including bank statements showing the deposits, evidence of the cash source (e.g., prior business sales, documented savings), and borrower's signed certification of the source.","rule":"The SBA requires clear verification of the source and use of equity injection funds. For cash deposits, a lender must document the accumulation of funds in the borrower's account over time and obtain a reasonable explanation and supporting evidence for the source of these cash funds, beyond mere self-certification, to ensure they are not borrowed or undocumented.","example":"A borrower for a $500,000 acquisition loan claims a $50,000 cash injection from accumulated savings. The lender obtains 12 months of bank statements showing regular cash deposits of $3,000-$5,000. The lender requests documentation (e.g., prior tax returns, pay stubs, withdrawal slips from another account) and a signed affidavit from the borrower explaining the consistent cash source.","what_lenders_check":"Lenders must prevent 'round-tripping' of funds or undisclosed borrowed equity. They look for consistent, verifiable sources for cash deposits, ensuring they are not from a prohibited source or used to circumvent injection requirements. Lack of clear source documentation is a common issue for guaranty repairs.","required_facts":["Cash deposits history","Source of cash","Bank statements","Borrower certification"],"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":"How does a lender verify equity injection funds originating from a newly established business bank account?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-originating-from-a-newly-established-busin"},{"question":"Can a borrower's investment in leasehold improvements prior to loan closing count towards the equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-leasehold-improvements-prior-to-loan-closing-count-towards-"},{"question":"What specific documentation is required to verify the source of gifted equity injection funds from a foreign family member?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-the-source-of-gifted-equity-injection-fu"},{"question":"If a borrower contributes equipment as equity, how does the lender verify its fair market value?","url":"https://dealroom.so/for-lenders/questions/if-a-borrower-contributes-equipment-as-equity-how-does-the-lender-verify-its-fair-market-v"},{"question":"What specific conditions must a personal loan from a non-owner family member meet to count as equity injection for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-must-a-personal-loan-from-a-non-owner-family-member-meet-to-count"},{"question":"How does a lender verify the source of gifted equity injection funds from a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-from-a-foreign-nation"}],"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":"Retirement account funds","url":"https://dealroom.so/glossary/retirement-account-funds"},{"term":"Personal Funds","url":"https://dealroom.so/glossary/personal-funds"}],"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/for-lenders/questions/what-documentation-verifies-equity-injection-funds-deposited-as-cash-into-a-borrower-s-per","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."]}