SBA 7(a) Q&A
Short answer
Yes, personal funds borrowed against assets not being acquired by the business can potentially count as equity injection, provided the loan is not secured by the business assets or the SBA-financed project.
Funds borrowed from a third party, including a personal loan from a credit union, can qualify as an equity injection if they are truly at risk in the business. This means the loan must not be repaid from the cash flow of the business being acquired, nor secured by any of the business assets or the project assets of the SBA loan. The borrower's personal assets (like a home equity loan on a personal residence) that are not part of the business acquisition can be used as collateral.
You secure a $50,000 personal loan from a credit union, collateralized by equity in your primary residence (not acquired by the business). These funds can be injected as cash equity into your business acquisition.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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