{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-if-i-am-buying-a-business-with-a-partner-and-they-contribute-assets-instead-of-cash-f","api_url":"https://dealroom.so/api/public/questions/what-if-i-am-buying-a-business-with-a-partner-and-they-contribute-assets-instead-of-cash-f","question":"What if I am buying a business with a partner and they contribute assets instead of cash for their portion of equity?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, a partner can contribute assets instead of cash for their portion of the equity injection, provided the assets are eligible and properly valued.","rule":"Each owner's contribution to the equity injection can be in the form of cash, unencumbered personal assets, or unencumbered business assets, subject to proper valuation. The total equity injection from all owners must meet the SBA's minimum requirements (typically 10% for acquisitions). The lender must verify the value and unencumbered status of any asset contribution.","example":"Two partners are acquiring a $1,000,000 business requiring a $100,000 equity injection. Partner A contributes $50,000 cash. Partner B contributes $50,000 worth of specialized equipment (unencumbered and independently appraised) to meet their share of the injection.","what_lenders_check":"The lender will verify that the assets contributed by the partner are unencumbered, independently valued (e.g., by appraisal), and essential to the business. They ensure all partners' contributions collectively meet the required minimum.","required_facts":["Partner contribution","Non-cash assets","Independent valuation","Unencumbered","Equity requirement"],"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":"Can I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner"},{"term":"Business Assets","url":"https://dealroom.so/glossary/business-assets"},{"term":"Office of Franchise and Business Opportunity","url":"https://dealroom.so/glossary/office-of-franchise-and-business-opportunity"},{"term":"Partner","url":"https://dealroom.so/glossary/partner"},{"term":"Liquidity of Assets","url":"https://dealroom.so/glossary/liquidity-of-assets"},{"term":"Assets, Liabilities, and Net Worth","url":"https://dealroom.so/glossary/assets-liabilities-and-net-worth"}],"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-7a/questions/what-if-i-am-buying-a-business-with-a-partner-and-they-contribute-assets-instead-of-cash-f","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."]}