SBA loan basics
Short answer
Yes, funds from an inheritance can be used for the borrower's equity injection (down payment) for an SBA 7(a) loan, provided they are properly documented as unencumbered funds.
The SBA requires that the borrower's equity injection comes from unencumbered sources, meaning funds that are not borrowed or subject to liens. An inheritance, once received and documented, is considered personal unencumbered capital and is acceptable.
A borrower received a $50,000 inheritance. They can use this amount as their 10% equity injection for a $500,000 business acquisition loan, provided they can show the funds' origin and clear receipt.
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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