Capital Injection
Equity injection is a practice in which borrowers are required to invest some of their own assets into their businesses, ensuring that they have a personal financial stake in the venture. This approach allows the SBA to offer loans to borrowers who might not qualify for traditional business loans otherwise.
Because an SBA borrower may not have all of the collateral or proven cash flow required by the private sector, the SBA can require its borrowers to inject their own assets (including but not limited to cash) into the project.
The Capital Injection section (below) is part of the Loan Information screen and is viewable when you select Loan Information from the submenu.
The following list describes the features within the Loan Payments section.
- Non-Cash Assets
- Enter a dollar amount for non-cash assets to be included for capital injection.
- Cash - Personal
- Enter a dollar amount for personal cash.
- Cash - Debt
- Enter a dollar amount for cash debt.
- Cash - Gifts
- Enter a dollar amount for cash gift.
- Standby Debt
- Enter a dollar amount for standby debt.Note:The SBA is expecting Standby Debt to be new standby debt. Existing Standby Debt should not be included here as it is not considered a capital injection.
- Other
- Enter a dollar amount for any other assets to be included for capital injection.
- Other Description
- Enter a description for any amount entered in the Other field.