SBA 7(a) Q&A
Short answer
Yes, funds from a loan secured by non-business personal assets, such as a home equity loan or a loan against marketable securities, can be used for the equity injection. The key is that the funds are not borrowed against the business itself.
The SBA permits equity injection from funds that are borrowed, provided the loan is secured by assets other than the business being acquired or the assets of that business. This prevents the borrower from effectively leveraging the business beyond SBA guidelines for the equity portion.
A buyer needs a $75,000 equity injection. They take out a $50,000 home equity loan, securing it with their personal residence, and contribute $25,000 in cash. This $75,000 would qualify.
Insider move
Lenders verify that the personal loan is genuinely secured by non-business assets and that the borrower has sufficient personal capacity to repay both the personal loan and the SBA loan.
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 2026-06-13. 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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