SBA 7(a) Q&A
Short answer
Yes, an investor can fund your down payment, but their funds must be documented as a true, unconditional gift or as a subordinated debt instrument that functions as equity.
If an investor is not taking an ownership stake of 20% or more, their contribution must be treated either as a gift (with no expectation of repayment) or as a seller note equivalent on full standby, subordinated to the SBA loan. Any other arrangement might be considered impermissible leverage.
An investor provides $50,000 for your $100,000 down payment for a business acquisition. This $50,000 would need to be formally documented as a non-repayable gift, with no ownership claim or interest payment expectation from the investor.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
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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