SBA 7(a) Q&A
Short answer
Funds that are borrowed, encumbered, or represent future services, as well as typical closing costs and broker fees, are generally excluded from counting towards the minimum 10% equity injection.
The SBA requires the equity injection to be unencumbered cash or assets clearly at risk. Funds obtained through personal loans, credit cards, or lines of credit (unless secured by non-business assets and not repaid from business cash flow), along with intangible "sweat equity" and standard transaction costs, are explicitly disallowed.
If a buyer borrows $30,000 from a personal line of credit to contribute to a $50,000 equity injection, that $30,000 portion will not count. Similarly, a $5,000 appraisal fee or $10,000 attorney fees cannot be part of the injection.
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.
More on what counts toward the 10%
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