SBA loan basics
Short answer
The SBA requires lenders to verify the source of all funds used for your down payment (equity injection) to ensure they are from eligible, unencumbered sources and not borrowed or otherwise improperly obtained.
Lenders must obtain documentation, such as bank statements for a minimum of 90 days, to trace the source of equity injection funds. Funds must come from the borrower's verifiable personal resources and cannot be borrowed from another source or represent "sweat equity" or future services. Gifts are permissible but require specific documentation.
If a borrower states they are contributing $50,000 from savings, the lender will require bank statements showing those funds held in the account for at least 90 days. If the funds recently appeared, the lender would require documentation of the source (e.g., sale of a personal asset, gift letter with donor's bank statements).
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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