For SBA lenders
Short answer
Yes, the fair market value of unencumbered equipment contributed by the borrower to the business can count towards the equity injection, provided it is properly valued and documented.
Equity injection can consist of cash, fixed assets, or a combination thereof. If a borrower contributes existing equipment, the fair market value of that equipment, as determined by an independent appraisal or other acceptable valuation method, may be counted as equity, provided it is unencumbered.
A borrower purchasing a manufacturing business needs $50,000 in equity. They own a piece of specialized machinery, valued at $30,000 by an independent appraiser, which they will contribute to the acquired business. This $30,000 can count towards their equity injection.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Standard 7(a) Authorization File Library
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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