For SBA lenders
Short answer
Yes, a borrower's investment in a certificate of deposit (CD) can count towards the equity injection if it is unencumbered and can be liquidated to cash prior to or at closing.
The SBA requires equity injection to be cash or unencumbered assets. A CD, while not immediately cash, is a liquid financial instrument. The lender must ensure the CD is solely owned by the borrower, not subject to any liens, and confirm that it can be cashed out at closing without penalty or delay, with the funds then used for the injection.
A borrower holds a $75,000 CD. The lender would request the CD statement, verify it's unencumbered, and require the borrower to either cash it out before closing or assign it to the business/lender at closing as part of the injection funds.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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