For SBA lenders
Short answer
When a foreign national provides gifted equity injection funds, the lender must obtain a gift letter, evidence of the donor's ability to give, and documentation tracing the funds from the donor's foreign account to the borrower's U.S. account. Enhanced due diligence is required to comply with AML/BSA regulations.
SBA policy allows gifted funds for equity injection, but the source must be verifiable and legitimate. When the donor is a foreign national, lenders must perform enhanced due diligence to ensure compliance with Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) regulations. This includes obtaining a gift letter, verifying the donor's identity, obtaining bank statements from the donor's foreign account showing fund availability, and tracing the transfer of funds through established financial institutions to the borrower's U.S. account. The lender must ensure the funds are not from an ineligible source or illegal activity.
A borrower receives a $75,000 gift from a relative in Canada for equity injection. The lender requires a gift letter, the relative's bank statements showing the funds, and bank wire transfer records demonstrating the funds moved directly from the relative's Canadian bank to the borrower's U.S. business account, along with an explanation of the relationship.
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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