For SBA lenders
Short answer
An unsecured personal loan from an unrelated third party cannot count as equity injection for an SBA 7(a) loan. Equity must be unencumbered and come from the borrower or specific eligible sources.
SBA rules generally require equity injection to come from the personal resources of the borrower, be unencumbered, and not be debt. A loan from a third party, even if unsecured, is still considered debt and does not represent the borrower's permanent investment in the business, thus it cannot be counted as equity.
A borrower plans to inject $50,000 for a $500,000 acquisition. $20,000 is from personal savings, and $30,000 is from a personal loan from a friend. The lender must inform the borrower that the $30,000 from the friend's loan cannot count as equity and the borrower must find an eligible source for the remaining injection.
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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