SBA loan basics
Short answer
Yes, for an existing business, verifiable retained earnings can count towards the equity injection requirement for an SBA 7(a) loan, provided they are unencumbered.
When a business owner uses their existing business's retained earnings, these funds represent the owner's investment that has been kept within the company. Lenders must verify these funds are indeed unencumbered and available in the business's accounts.
A business owner wants a $1,000,000 loan to expand, requiring a $100,000 equity injection. If their business has $150,000 in retained earnings, they can use $100,000 of it as their equity injection.
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.
More on down payment & equity injection
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day