Glossary · Your money in the deal
Third-Party Equity Investments
In short
This is cash invested in your acquisition by someone other than you or the seller, like a family member or passive investor. These funds can count towards your minimum equity injection.
What it means in a deal
For third-party equity to count towards your required injection, the SBA requires specific documentation, such as a gift letter or investment agreement. These funds must be unencumbered and cannot be repaid from the business's cash flow. Your lender will verify the source and ensure no disguised debt is involved.
Official sources
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 Third-Party Equity Investments
- Can a third-party loan, not from the seller, count towards the minimum equity injection?
- What are the eligibility requirements for funds borrowed from a third party to count as equity injection?
- Can a borrower contribute a promissory note from a third party as part of their equity injection?
- Can a loan secured by non-business personal assets from a third party count as equity injection?
- How does a lender verify equity injection funds that are a cash gift from a non-family third party?
- How should a lender verify an equity injection sourced from an unsecured personal loan from an unrelated third party?
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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