SBA 7(a) Q&A
Short answer
Yes, funds from a loan against your 401k or other retirement account can generally be used for your equity injection.
A loan against a retirement account, such as a 401k, is typically considered a verifiable source of funds for equity injection because it represents the borrower's own funds. Unlike a typical third-party loan, it doesn't create a new external debt obligation that competes with the SBA loan for repayment from the business.
A buyer needs $100,000 for their equity injection. They secure a $70,000 loan against their 401k. This $70,000, once received and injected into the business, would count towards the required equity.
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 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. 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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