{"ok":true,"canonical_url":"https://dealroom.so/glossary/at-risk-equity","api_url":"https://dealroom.so/api/public/glossary/at-risk-equity","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"at-risk-equity","term":"At-Risk Equity","group":"Your money in the deal","definition":"This is the portion of your equity injection into the business that cannot be withdrawn or paid back to you for a period, typically two years. It's the buyer's true cash commitment to the deal.","what_it_means":"The SBA requires a minimum equity injection, and a significant portion must be \"at-risk.\" This means you can't fund it with a loan that isn't on full standby or immediately take it back out. Your lender will verify these funds are unencumbered and committed to the business.","url":"https://dealroom.so/glossary/at-risk-equity","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"non-cash-equity-injection","term":"Non-Cash Equity Injection","url":"https://dealroom.so/glossary/non-cash-equity-injection"},{"slug":"seasoned-funds","term":"Seasoned funds","url":"https://dealroom.so/glossary/seasoned-funds"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"}],"related_questions":[{"question":"Is a personal guaranty required from every owner with at least 20% equity in the acquiring business?","url":"https://dealroom.so/sba-7a/questions/is-a-personal-guaranty-required-from-every-owner-with-at-least-20-equity-in-the-acquiring-"},{"question":"Are there specific circumstances where a seller's equity in the business must be fully paid out at closing?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-circumstances-where-a-seller-s-equity-in-the-business-must-be-fully-pai"},{"question":"If I contribute existing equipment valued at $50,000 to the acquired business, can it count towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/if-i-contribute-existing-equipment-valued-at-50-000-to-the-acquired-business-can-it-count-"},{"question":"Can I use a portion of the business's existing cash on hand at closing towards my equity injection, if it's not from the seller?","url":"https://dealroom.so/sba-7a/questions/can-i-use-a-portion-of-the-business-s-existing-cash-on-hand-at-closing-towards-my-equity-i"},{"question":"Can a 7(a) loan be used to pay out a portion of the seller's equity at closing, even if they remain a minority owner?","url":"https://dealroom.so/for-lenders/questions/can-a-7-a-loan-be-used-to-pay-out-a-portion-of-the-seller-s-equity-at-closing-even-if-they"},{"question":"What happens if the business being acquired has significant outstanding tax liabilities at closing?","url":"https://dealroom.so/for-lenders/questions/what-happens-if-the-business-being-acquired-has-significant-outstanding-tax-liabilities-at"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — At-Risk Equity","url":"https://dealroom.so/glossary/at-risk-equity","source_type":"DealRoom Data"}}