{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-kind-of-documentation-does-the-sba-require-for-a-gift-from-a-foreign-relative-for-equ","api_url":"https://dealroom.so/api/public/questions/what-kind-of-documentation-does-the-sba-require-for-a-gift-from-a-foreign-relative-for-equ","question":"What kind of documentation does the SBA require for a gift from a foreign relative for equity injection?","topic":"Gift/investor funds","audience":"borrower","bot_mode":"buyer","short_answer":"A gift from a foreign relative requires extensive documentation, including a gift letter, proof of fund transfer, and verification of the donor's source of funds.","rule":"For a gift from a foreign relative, the SBA requires a signed gift letter stating the funds are a true gift with no expectation of repayment. Additionally, lenders must document the transfer of funds from the donor's foreign bank account to the borrower's domestic account and, critically, verify the donor's source of funds through bank statements or other financial records to ensure they are legitimate and unencumbered.","example":"A buyer receives a $50,000 gift from an aunt in Canada. The lender will require a signed gift letter from the aunt, bank statements showing the funds originating from her Canadian account, and the transfer of funds to the buyer's US account. The aunt's source of funds must also be clear.","what_lenders_check":"Lenders face heightened scrutiny for foreign gifts due to anti-money laundering regulations and the need to verify funds are truly unencumbered. They will carefully trace the funds and require robust documentation of the donor's financial standing.","required_facts":["Gift letter","Proof of transfer","Donor source of funds","Foreign bank statements"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"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":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Cancellation of the SBA guaranty","url":"https://dealroom.so/glossary/cancellation-of-the-sba-guaranty"},{"term":"Gift","url":"https://dealroom.so/glossary/gift"},{"term":"Collateral documentation","url":"https://dealroom.so/glossary/collateral-documentation"},{"term":"Eligibility documentation","url":"https://dealroom.so/glossary/eligibility-documentation"},{"term":"Foreign national","url":"https://dealroom.so/glossary/foreign-national"}],"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-kind-of-documentation-does-the-sba-require-for-a-gift-from-a-foreign-relative-for-equ","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."]}