For SBA lenders
Short answer
The lender must obtain a gift letter from the donor stating the funds are a gift with no repayment expected, along with bank statements from both the donor and recipient showing the transfer and sufficiency of funds.
For gifts to qualify as equity injection, the SBA requires clear evidence that the funds are truly a gift and not a disguised loan. This includes formal documentation from the donor and verification of the funds' source and transfer.
A borrower receives a $25,000 gift from their parents for equity. The lender collects a signed gift letter from the parents and bank statements from both the parents (showing the withdrawal) and the borrower (showing the deposit) to confirm the transaction.
Insider move
Lenders must ensure the gift is legitimate and not a loan, which would impact the borrower's debt service capacity and equity calculation. Inadequate documentation can lead to a guaranty repair.
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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