SBA 7(a) Q&A
Short answer
The value of personally-owned commercial real estate contributed as equity injection is assessed via an independent appraisal.
SBA rules permit unencumbered assets owned by the borrower, including real estate, to count towards the equity injection. The value must be established by an independent valuation, typically an appraisal, and cannot exceed its net book value or appraised value, whichever is lower. The lender must ensure no liens or encumbrances exist.
A buyer needs a $100,000 equity injection. They contribute a personally owned commercial lot appraised at $75,000 and $25,000 in cash. The $75,000 appraisal value is used for the non-cash injection.
Insider move
Lenders will require a current, independent appraisal of the property and a title search to confirm it is unencumbered. They verify the property's relevance to the acquired business and proper documentation of its transfer.
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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