Gift tax is paid by the donor and not by the receiver.
"if my sister offered to "pay" for some of the business start up like construction out of her own pocket without getting any equity."
It is her help for you to start your business.
In your book, you can deduct expenses. You book cash and loan from sister. Or because she is going to help you, the money you get is yours, you can book cash versus your own equity account. Then later, deduct cash to pay the deductible construction cost.
No matter where you get the money, your business can deduct the expenses.
Let your sister worry about the tax and reporting consequence of the gift. This is not a loophole. Families help each other all the times.
Please feel free to follow up.
Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP