SBA 7(a) Q&A
Short answer
Generally, no, funds borrowed against assets that are not part of the business being acquired and not personally owned by the borrower typically cannot count as equity injection. The injection must be from unencumbered personal funds.
SBA requires that the equity injection be from the personal resources of the borrower. Funds that are borrowed, even against personal assets, are typically considered debt and not true equity. The funds must represent the borrower's ownership stake and commitment.
If you take out a $50,000 personal loan against a car title to fund your equity, the lender would likely disallow this, as it is borrowed money, not unencumbered personal equity.
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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