For SBA lenders
Short answer
Yes, a personal loan from a non-owner family member can count as equity if it is on full standby, unsecured, and evidenced by a subordination agreement acceptable to the SBA.
For a loan from an eligible third party (including a non-owner family member) to count as equity injection, it must be on full standby for the life of the SBA loan, meaning no payments of principal or interest can be made. It must also be unsecured and fully subordinated to the SBA loan, and the terms must be documented in a standby agreement.
A borrower receives a $75,000 loan from their sibling for equity. For this to count, the lender requires a promissory note and a full standby agreement, stating no payments will be made until the SBA loan is paid in full, and it must be unsecured.
Insider move
Lenders must ensure all standby requirements are met, including proper documentation and a clear understanding that the funds are truly at risk as equity. Any deviation could result in the funds not being counted as equity.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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