SBA 7(a) Q&A
Short answer
No, prepaid rent for the acquired business generally cannot count towards your equity injection for an SBA 7(a) loan.
The SBA requires equity injection to represent genuine capital investment from the borrower, not operational expenses or items that are essentially short-term liabilities or assets. Prepaid rent is an operating expense that will be consumed by the business, not a long-term capital contribution.
If you prepay six months of rent totaling $30,000 for the acquired business's lease, this would be an operational expense, not a part of your required 10% equity injection on a $600,000 acquisition.
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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