{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-process-for-a-lender-to-verify-a-cash-equity-injection-that-has-been-held-in-t","api_url":"https://dealroom.so/api/public/questions/what-is-the-process-for-a-lender-to-verify-a-cash-equity-injection-that-has-been-held-in-t","question":"What is the process for a lender to verify a cash equity injection that has been held in the borrower's personal savings account for less than 90 days?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"The lender must trace the source of these funds to ensure they were not borrowed, are unencumbered, and genuinely belong to the borrower, especially if they are not from existing personal assets like a checking account or investments.","rule":"While a 90-day seasoning rule for equity injection is often cited, the key is to ensure the funds are not borrowed and are unencumbered. If funds appear in an account less than 90 days before application, the lender must obtain documentation (e.g., prior bank statements, gift letters, sale agreements) to verify the ultimate source and ensure they are eligible for injection.","example":"A borrower shows $50,000 deposited into their savings account two weeks ago, intended for equity. The lender asks for statements from the prior account from which funds originated, or a signed gift letter from the donor and their bank statements, to confirm the funds are not from a short-term, undisclosed loan.","what_lenders_check":"The primary concern is preventing 'hidden' debt from appearing as equity. Lenders must diligently trace recent large deposits to their origin to confirm they meet SBA's unencumbered and non-borrowed equity requirements, documenting their findings in the loan file.","required_facts":["Cash injection","Under 90 days","Source of funds","Unencumbered","Not borrowed"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","7(a) Fees Effective During Fiscal Year 2026","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":"7(a) Fees Effective During Fiscal Year 2026","url":"https://www.sba.gov/sites/default/files/2025-08/Info%20Notice%20-%207%28a%29%20Fees%20FY%202026%20%28FINAL%208-28-25%29.pdf"},{"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":"Cash equity","url":"https://dealroom.so/glossary/cash-equity"},{"term":"Minimum cash injection","url":"https://dealroom.so/glossary/minimum-cash-injection"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-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-is-the-process-for-a-lender-to-verify-a-cash-equity-injection-that-has-been-held-in-t","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."]}