SBA 7(a) Q&A
Short answer
No, a tenant improvement allowance from a landlord cannot count towards your equity injection for an SBA 7(a) loan, as it is a landlord contribution, not equity from the borrower.
Equity injection must come from the borrower or eligible third-party sources (like a seller note or qualified gift/investor funds). A tenant improvement allowance is a contractual concession from the landlord, reducing the tenant's out-of-pocket expenses, but it does not represent invested capital from the borrower.
If your landlord offers a $50,000 tenant improvement allowance, this reduces the cash you need to spend on leasehold improvements but does not count as part of your required 10% equity for a $500,000 project.
Lenders verify that all equity comes from acceptable sources. Landlord contributions are not considered equity and cannot offset the borrower's required injection. They ensure proper accounting for all project costs and funding sources.
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.
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day