SBA 7(a) Q&A
Short answer
Gift funds are acceptable for an equity injection but must be thoroughly documented with a gift letter, evidence of funds transfer, and verification that the donor has no ownership interest or repayment expectation. The funds must be irrevocably transferred to the borrower.
SBA policy permits gift funds as part of the equity injection, provided they are truly gifts. This means the donor cannot be an owner of the business, nor can they have any expectation of repayment or future equity. The transaction must be transparent, with clear documentation tracing the funds from the donor's account to the borrower's account.
A buyer receives a $75,000 gift from a parent for a $750,000 acquisition's down payment. The lender will require a signed gift letter from the parent stating no repayment is expected, along with bank statements showing the funds leaving the parent's account and arriving in the buyer's account.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
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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