SBA 7(a) Q&A
Short answer
Yes, the fair market value of unencumbered equipment or other tangible assets contributed to the business by the buyer can count towards the equity injection.
The SBA allows for tangible assets, such as equipment, machinery, or real estate, contributed by the buyer to the business to count towards the equity injection. These assets must be valued at their fair market value by an independent appraiser, be unencumbered, and be clearly documented as a contribution to the business's capital.
A buyer acquires a landscaping business for $300,000. They contribute $15,000 worth of unencumbered heavy equipment they already own to the business. This $15,000 can count towards the required 10% ($30,000) equity injection.
Insider move
Lenders require an independent appraisal of the contributed assets to verify fair market value. They also ensure the assets are truly unencumbered and properly transferred to the business entity.
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 what counts toward the 10%
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