SBA 7(a) Q&A
Short answer
No, funds from a personal line of credit (unsecured) are generally not considered eligible for equity injection as they constitute new debt.
The SBA requires equity injection funds to come from unencumbered sources. A personal line of credit, being new debt that the borrower must repay, is generally not considered an acceptable source for equity injection because it does not represent the borrower's own capital at risk. The intent is to ensure the borrower has 'skin in the game' from their own resources, not borrowed money.
You have a $50,000 personal line of credit. Drawing these funds to use for your $100,000 equity injection for a $1,000,000 business acquisition would typically not be allowed by the SBA. The lender would require proof that your injection funds come from verified, unencumbered sources.
Insider move
Lenders need to verify that the equity injection truly represents the borrower's own capital. They will review bank statements and source of funds documentation to ensure the funds are not from new, uncollateralized debt that would weaken the borrower's financial position.
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 equity injection
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