SBA 7(a) Q&A
Short answer
No, gifts for equity injection must come from an individual (a close family member), not a corporate entity, to be recognized by the SBA.
SBA policy on gifted funds for equity injection specifically refers to gifts from 'close family members' (individuals). A gift from a corporate entity, even if related to the borrower, does not fit this definition and would not be accepted as valid equity injection. The SBA's intention is to ensure that equity comes from the borrower's personal resources or a direct, unconditional personal gift.
A buyer needs $80,000 equity for a business purchase. Their existing holding company attempts to 'gift' $80,000 to the buyer for the equity injection. This would be deemed ineligible by the lender.
Insider move
Lenders must trace the source of gifted funds to verify they are from an eligible individual and not a corporate entity, to comply with SBA equity injection rules and avoid potential affiliation or control issues.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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.
More on gift/investor funds
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