SBA loan basics
Short answer
Yes, gifted funds from immediate family members, such as parents, can be used for the equity injection (down payment) for an SBA 7(a) loan, provided it is a true gift with no expectation of repayment.
The SBA allows gifted funds for equity injection if the gift is from an immediate family member, properly documented with a gift letter, and there is no repayment obligation. The gift must be freely given and not sourced from a party with an interest in the loan (like the seller).
A new business owner, Emily, needs a $50,000 equity injection. Her parents provide her with $50,000 as a gift. With a formal gift letter stating no repayment is expected, these funds can be accepted as Emily's equity injection for her SBA 7(a) loan.
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
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.
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