[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR120.102]

[Page 222]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 120_BUSINESS LOANS--Table of Contents
 
            Subpart A_Policies Applying to All Business Loans
 
Sec.  120.102  Funds not available from alternative sources, including 

personal resources of principals.

    (a) An applicant for a business loan must show that the desired 
funds are not available from the personal resources of any owner of 20 
percent or more of the equity of the applicant. SBA will require the use 
of personal resources from any such owner as an injection to reduce the 
SBA funded portion of the total financing package (i.e., any SBA loans 
and any other financing, including loans from any other source) when 
that owner's liquid assets exceed the amounts specified in paragraphs 
(a) (1) through (3) of this section. When the total financing package:
    (1) Is $250,000 or less, each 20 percent owner of the applicant must 
inject any personal liquid assets which are in excess of two times the 
total financing package or $100,000, whichever is greater;
    (2) Is between $250,001 and $500,000, each 20 percent owner of the 
applicant must inject any personal liquid assets which are in excess of 
one and one-half times the total financing package or $500,000, 
whichever is greater;
    (3) Exceeds $500,000, each 20 percent owner of the applicant must 
inject any personal liquid assets which are in excess of one times the 
total financing package or $750,000, whichever is greater.
    (b) Any liquid assets in excess of the applicable amount set forth 
in paragraph (a) of this section must be used to reduce the SBA portion 
of the total financing package. These funds must be injected prior to 
the disbursement of the proceeds of any SBA financing.
    (c) For purposes of this section, liquid assets means cash or cash 
equivalent, including savings accounts, CDs, stocks, bonds, or other 
similar assets. Equity in real estate holdings and other fixed assets 
are not to be considered liquid assets.