SBA deposit

August 28, 2023

by a searcher in Chicago, IL, USA

Is it possible to use my credit card (cash advance) or a personal loan to pay for the 5% - 10% equity required by the SBA?
My credit card company allows me to take a cash advance and my Bank has also approved me for a personal loan.
Would the SBA allow me to use either of these two methods as my equity into the deal?
Thank you in advance for your help and suggestions.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I concur with Daniel with the exception of the fact you can use equity in a home equity loan, but you have to be able to prove you have another source of payment for the home equity loan. So if it is something your wife has income to pay on, then you can use that. Lenders generally will not accept the payment from even a debit card. They typically want a check or wire for the deposit.

Reply by a lender
from Florida State University in St. Petersburg, FL, USA

SBA lenders will require the source of injection to be purely equity - cannot be borrowed funds of any degree as Daniel had mentioned above. If liquidity may be an issue, clients will sometimes lean on gifted equity from business partners, family, friends, etc. The HELOC route that Brad mentioned is also viable (if you have repayment ability for the home equity loan portion).

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