SBA 7(a) Q&A
Short answer
Yes, gifted funds from a non-relative can count as equity injection if properly documented, the donor is not benefiting from the transaction, and it's a true gift with no repayment expectation.
The SBA requires gifts used for equity injection to be unconditional and not subject to repayment. A gift letter from the donor stating the funds are a gift with no repayment terms is essential. The lender must verify the source of the gifted funds and ensure the donor is not an associate or otherwise benefiting from the loan proceeds.
A close friend gifts you $25,000 for your business acquisition. You would need a signed gift letter from them, and the lender would verify the funds originated from your friend's account and were transferred to your business account, with no expectation of repayment.
Insider move
Lenders must verify the legitimacy of the gift, ensuring it's not a disguised loan or a way to circumvent equity requirements. They scrutinize the relationship between the borrower and donor, especially for non-family members, to avoid potential conflicts of interest.
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.
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