SBA 7(a) Q&A
Short answer
Yes, a buyer's cash infusion into the business prior to loan closing can count as equity injection if properly documented and verified as unencumbered.
Funds injected into the business by the borrower prior to the loan closing are considered equity, provided these funds are clearly documented, verifiable, and were not borrowed or provided by an ineligible source. This demonstrates the borrower's commitment.
A buyer deposits $50,000 into the target business's bank account two months before closing to improve its cash position, and this is counted towards their $80,000 equity requirement.
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
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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