For SBA lenders
Short answer
Verifying a gift from a non-family member requires a formal gift letter, evidence the donor has sufficient funds, and verification the funds were transferred to the borrower without expectation of repayment.
While gifts from family members are more common, gifts from non-family members are also allowed for equity injection. The lender must obtain a signed gift letter from the donor stating the funds are a gift, not a loan, and have no repayment expectation. The lender must also verify the donor's source of funds and the direct transfer of funds to the borrower's account, ensuring the gift is legitimate and unencumbered.
A borrower receives a $20,000 gift from a close friend for their equity injection. The lender requires a notarized gift letter from the friend, bank statements showing the friend's available funds, and a copy of the wire transfer showing the funds moved directly into the borrower's personal account, ensuring clear documentation of the gift.
Insider move
Lenders must be diligent in verifying gifts to ensure they are genuine and not disguised loans, which would undermine the equity injection requirement. Strict documentation of the gift letter, donor's capacity, and fund transfer is essential.
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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