SBA

As a forward thinking business leader understanding Equity injection requirements is crucial. Equity injection is the portion of funds that come directly from you the borrower, typically in the form of cash. For SBA loans it is often a requirement (with few exceptions). SBA allows for various equity injection options to cover the amount required, lets discuss further… -Cash from Savings- Personal savings/ cash are one of the most common forms. Keep receipts, bank statements or transfer records for every dollar used towards equity injection. -Gifted funds- if part of your funds are going to come from family or friends, a signed gift letter stating no repayment is expected will be required. -Retirement assets – ROBS or early retirement funds -Seller note- a portion of the equity injection can sometimes come from seller financing -Investors/ Minority partners- Equity from outside investors in exchange for partial ownership. Planning ahead allows you to address any potential gaps in funding or documentation without jeopardizing your loan approval timeline.