{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/what-types-of-things-count-as-my-equity-injection-or-down-payment-for-an-sba-7-a-loan","api_url":"https://dealroom.so/api/public/questions/what-types-of-things-count-as-my-equity-injection-or-down-payment-for-an-sba-7-a-loan","question":"What types of things count as my 'equity injection' or down payment for an SBA 7(a) loan?","topic":"Down payment & equity injection","audience":"new","bot_mode":"buyer","short_answer":"Equity injection can include cash, assets valued at fair market value, or certain types of seller financing placed on 'full standby.' It must be unencumbered and from an eligible source.","rule":"The SBA permits various forms of equity injection. Cash from personal savings is common. Other forms include unencumbered business assets (like equipment or real estate) contributed at fair market value, or a seller note that is on 'full standby' (meaning no payments of principal or interest are made until the SBA loan is fully repaid). Gifted funds from eligible sources can also count.","example":"For a $500,000 project, a borrower might contribute $30,000 cash, $20,000 worth of unencumbered equipment they already own, and the seller might agree to carry a $50,000 note on full standby, totaling $100,000 (20% equity).","what_lenders_check":"Lenders must rigorously verify the source, amount, and unencumbered status of all equity injections. For non-cash assets, an independent valuation is often required. For seller notes, strict documentation of the full standby agreement is crucial.","required_facts":["Cash savings","Unencumbered assets","Seller note (full standby)","Gift funds (eligible sources)","Verified source"],"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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/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-loans/basics/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Demand for Payment","url":"https://dealroom.so/glossary/demand-for-payment"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-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/sba-loans/basics/what-types-of-things-count-as-my-equity-injection-or-down-payment-for-an-sba-7-a-loan","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."]}