SBA 7(a) Q&A
Short answer
It depends; a grant may count towards the equity injection if it is non-repayable and not conditioned on the SBA loan approval itself.
Funds from a grant can qualify as equity if they are truly unencumbered and do not create new debt for the business or the borrower. The SBA scrutinizes any conditions attached to the grant to ensure it aligns with equity injection requirements.
A buyer secures a $25,000 grant from a city program contingent on creating five new jobs within a year. If this grant is non-repayable, it can be considered towards the equity injection for a $400,000 business acquisition.
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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