SBA 7(a) Q&A
Short answer
The SBA verifies the source of cash equity injection by requiring the lender to collect personal bank statements and transaction records from the borrower.
Lenders must trace the source of equity injection funds to ensure they are unencumbered and truly belong to the borrower. This involves reviewing bank statements for a period (e.g., 90 days) leading up to the injection, as well as deposit slips or wire transfer confirmations into the business's account.
A buyer provides 90 days of personal savings account statements showing a consistent balance sufficient for the $50,000 equity injection. They then submit a wire transfer confirmation showing the $50,000 moving from their savings account to the business's operating account at closing.
Insider move
Lenders meticulously review bank statements to identify any unusual large deposits that might indicate borrowed funds. They ensure a clear audit trail from the borrower's personal account to the business's account or escrow.
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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