SBA 7(a) Q&A
Short answer
Funds from the recent sale of a primary residence can be used for equity injection, but require clear documentation of the sale and the funds' deposit.
The SBA generally requires verification of the source of equity injection funds. For recent asset sales, lenders must obtain a settlement statement (HUD-1 or equivalent) and bank statements showing the deposit of net proceeds to demonstrate the funds are unencumbered and truly belong to the borrower.
A buyer sells their home for $500,000, netting $150,000, and deposits these funds into their bank account 60 days before applying for an SBA loan. The lender will require the closing statement for the home sale and bank statements showing the deposit.
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 2026-06-14. 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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