And secure it with real estate or some other collateral, the loan may disqualify you for the SBA loan.

If you don’t document/secure the loan, the other party is taking the risk that you don’t pay them back and/or the loan causes some gift tax consequence. This seems to be what the bank is suggesting. Typically for underwriting you have to submit your two most recent months of bank statements, so the thinking is that the transfer won’t show up on those, but this assumes that you aren’t going to disclose the obligation to pay back the lender.