SBA 7(a) Q&A
Short answer
Certain non-cash assets can qualify for equity injection, including appraised equipment, real estate, or marketable securities, provided they are unencumbered and properly valued. The SBA prioritizes cash.
Non-cash assets must be valued by an independent, qualified appraiser and must be unencumbered (free of liens or other debt). The SBA prefers cash, but allows for non-cash assets to represent a portion of the required equity injection, often limited.
A buyer needs a $100,000 equity injection. They contribute $50,000 in cash and $50,000 in unencumbered business equipment, independently appraised at that value.
Insider move
Lenders must ensure the valuation is current and accurate, the assets are truly unencumbered, and that they contribute to the operational needs of the business, rather than being superfluous.
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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