SBA 7(a) Q&A
Short answer
A gift from a close family member can count as equity injection if it's an irrevocable gift, properly documented, and the donor provides a gift letter.
SBA rules allow gifts from close family members (spouse, child, parent, sibling, grandparent) to count as equity injection. The gift must be unconditional, without any expectation of repayment, and the donor must sign a gift letter confirming these terms. The funds must be deposited into the borrower's account.
For a $600,000 business acquisition requiring $60,000 equity, the buyer's parent gifts $30,000. This $30,000, with a proper gift letter and proof of transfer, can be used towards the buyer's equity injection.
Insider move
Lenders verify the donor's relationship, the irrevocability of the gift, and trace the funds to ensure they are unencumbered and come from an acceptable source. A signed gift letter is mandatory.
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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