SBA 7(a) Q&A
Short answer
Existing equipment you own can be valued for equity injection, but its fair market value must be independently verified by an appraisal or other acceptable method.
When contributing existing assets like equipment as equity, the SBA requires that their fair market value be established by an independent third-party appraisal, especially if the value is significant. The equipment must be unencumbered and essential to the business operations, demonstrating a tangible, permanent investment.
If you contribute $50,000 worth of unencumbered vehicles and machinery that you already own to satisfy part of a $100,000 equity injection, the lender will require a recent, independent appraisal of that equipment to confirm its fair market value.
Insider move
Lenders prioritize accurate valuation of non-cash equity injections to prevent overstatement of the buyer's true investment. They ensure the appraisal is from a qualified, independent source and that the assets are free of liens.
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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