Glossary · Your money in the deal
Gifted Equity
In short
This is a portion of the buyer's equity injection that comes from a gift, typically from a family member. It can count towards the buyer's required down payment, but has strict SBA requirements.
What it means in a deal
The SBA allows gifted equity to count towards your equity injection, provided the gift is truly unconditional and irrevocable, meaning the giver has no claim to the funds or the business. A gift letter and proof of funds transfer are required. Ensure the funds are "seasoned" or directly transferred without expectation of repayment.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Gifted Equity
- What are the rules for using gifted family funds as equity?
- What specific documentation is required if my equity injection includes gifted funds?
- Can funds gifted by a non-family investor contribute to my equity injection?
- How does the SBA 7(a) loan process verify the source of gifted equity injection funds?
- How does a lender verify the source of gifted equity injection funds from a foreign national?
- Can money gifted from a family member be used for my SBA 7(a) equity injection?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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