SBA loan basics
Short answer
Non-cash contributions such as appraised value of equipment, real estate, or a seller note on full standby can count towards the equity injection, provided they meet specific SBA criteria.
The SBA allows for certain non-cash contributions as part of the equity injection. This includes the fair market value of assets (like land, buildings, or equipment) injected into the business, or a seller note that is on 'full standby,' meaning no payments of principal or interest are made to the seller until the SBA loan is fully repaid.
For a $500,000 project, the borrower contributes $25,000 cash and injects a piece of commercial property they own, appraised at $25,000, into the business. This combined $50,000 (10%) meets the equity injection requirement.
Lenders must obtain independent appraisals for non-cash assets to establish their fair market value and ensure that any seller notes meet the strict full standby requirements for the duration of the SBA 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
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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