{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-if-my-family-wants-to-invest-in-my-business-acquisition-can-their-funds-count-towards","api_url":"https://dealroom.so/api/public/questions/what-if-my-family-wants-to-invest-in-my-business-acquisition-can-their-funds-count-towards","question":"What if my family wants to invest in my business acquisition; can their funds count towards equity?","topic":"Gift/investor funds","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, funds from family members or other investors can count towards your equity injection, provided they are structured as an unencumbered gift or an equity investment.","rule":"SBA allows gifted funds or bona fide equity investments from third parties to count towards the borrower's equity injection. For gifts, a gift letter stating no repayment is expected is required. For investments, clear documentation proving it's an equity stake and not a disguised loan is necessary, ensuring the funds are unencumbered.","example":"A buyer needs $100,000 equity. Their parents provide $50,000 as a gift, and a friend invests $25,000 for a minority equity stake. Both can count, along with $25,000 from the buyer's personal savings.","what_lenders_check":"Lenders will require formal gift letters or investment agreements, along with bank statements, to verify the source of funds and confirm they are not loans requiring repayment, which would negatively impact debt service.","required_facts":["Source of funds","Gift letter","Equity investment","No repayment obligation"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Form 1919 - Borrower Information Form"],"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":"SBA Form 1919 - Borrower Information Form","url":"https://www.sba.gov/sites/default/files/2025-03/2025.02.27%20Form%201919%20-%20Updates%20%28FINAL%29_03-12-2025%20%281%29.pdf"}],"related_questions":[{"question":"How can a gift from a close family member contribute to my equity injection for a $600,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/how-can-a-gift-from-a-close-family-member-contribute-to-my-equity-injection-for-a-600-000-"},{"question":"If my parents gift me $50,000 for a down payment, what specific documentation is required by the SBA?","url":"https://dealroom.so/sba-7a/questions/if-my-parents-gift-me-50-000-for-a-down-payment-what-specific-documentation-is-required-by"},{"question":"Can a corporate entity, not an individual, provide a gift that counts towards my equity injection for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-a-corporate-entity-not-an-individual-provide-a-gift-that-counts-towards-my-equity-inje"},{"question":"Can a gift from a non-family investor count towards my SBA 7(a) equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-gift-from-a-non-family-investor-count-towards-my-sba-7-a-equity-injection"},{"question":"Can a non-profit organization provide a grant that counts towards my equity injection for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-a-non-profit-organization-provide-a-grant-that-counts-towards-my-equity-injection-for-"},{"question":"Can a gift from a non-family friend for $50,000 be used for my equity injection on an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-a-gift-from-a-non-family-friend-for-50-000-be-used-for-my-equity-injection-on-an-sba-7"}],"related_terms":[{"term":"Business acquisition","url":"https://dealroom.so/glossary/business-acquisition"},{"term":"Business acquisition loan","url":"https://dealroom.so/glossary/business-acquisition-loan"},{"term":"Acquisition","url":"https://dealroom.so/glossary/acquisition"},{"term":"Close family relationship","url":"https://dealroom.so/glossary/close-family-relationship"},{"term":"Family member transaction","url":"https://dealroom.so/glossary/family-member-transaction"},{"term":"Immediate Family Members","url":"https://dealroom.so/glossary/immediate-family-members"}],"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-my-family-wants-to-invest-in-my-business-acquisition-can-their-funds-count-towards","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."]}