{"ok":true,"canonical_url":"https://dealroom.so/glossary/borrower-equity","api_url":"https://dealroom.so/api/public/glossary/borrower-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":"borrower-equity","term":"Borrower Equity","group":"Your money in the deal","definition":"The portion of the total project costs that the buyer contributes from their own funds, not financed by the SBA loan or seller. It demonstrates your commitment and reduces the lender's risk, typically requiring 10-20% for an SBA 7(a) loan.","what_it_means":"The SBA requires a minimum equity injection, typically 10% for established businesses, which must come from verifiable, unencumbered sources. This often comes from personal savings or a seller note on \"standby.\" Be prepared to provide clear documentation of your funds' origin and availability.","url":"https://dealroom.so/glossary/borrower-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":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"seasoned-funds","term":"Seasoned funds","url":"https://dealroom.so/glossary/seasoned-funds"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"}],"related_questions":[{"question":"Can a borrower's sweat equity count towards the required equity injection for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-sweat-equity-count-towards-the-required-equity-injection-for-a-7-a-loan"},{"question":"What documentation is needed to verify a borrower's equity injection when it comes from an existing business owned by the borrower?","url":"https://dealroom.so/for-lenders/questions/what-documentation-is-needed-to-verify-a-borrower-s-equity-injection-when-it-comes-from-an"},{"question":"How does a lender verify the source of a borrower's equity injection funds?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-a-borrower-s-equity-injection-funds"},{"question":"What specific documentation is required to verify equity from a borrower's personal real estate appraisal?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-equity-from-a-borrower-s-personal-real-e"},{"question":"Can a borrower use a cash-out refinance from personal real estate for the equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-use-a-cash-out-refinance-from-personal-real-estate-for-the-equity-injection"},{"question":"How does a lender verify equity injection from a borrower's personal credit card cash advance?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-from-a-borrower-s-personal-credit-card-cash-adva"}]},"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 — Borrower Equity","url":"https://dealroom.so/glossary/borrower-equity","source_type":"DealRoom Data"}}