{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/besides-cash-and-seller-notes-what-other-buyer-contributions-qualify-for-equity","api_url":"https://dealroom.so/api/public/questions/besides-cash-and-seller-notes-what-other-buyer-contributions-qualify-for-equity","question":"Besides cash and seller notes, what other buyer contributions qualify for equity?","topic":"What counts toward the 10%","audience":"borrower","bot_mode":"buyer","short_answer":"Besides cash and full-standby seller notes, other buyer contributions that may qualify for equity include qualified personal assets injected into the business, third-party equity investments without repayment obligations, or funds from a true gift.","rule":"The SBA permits various forms of equity, as long as they represent unencumbered funds or assets contributed by the buyer that are 'at risk' in the business. This excludes funds that are borrowed or create a repayment obligation that would impair the business's ability to service the SBA loan.","example":"For a $600,000 acquisition requiring $60,000 in equity, you could contribute $30,000 cash, a $20,000 seller note on full standby, and $10,000 in unencumbered machinery from a prior venture that is directly applicable to the acquired business, provided it is properly valued.","what_lenders_check":"Lenders will require thorough documentation and appraisal for any non-cash assets contributed as equity. They need to verify that these assets are truly unencumbered, properly valued, and directly benefit the acquired business without creating additional liabilities.","required_facts":["Personal assets","Third-party equity","True gift funds","Unencumbered contributions","Proper valuation"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"Can renovation costs for an acquired business premises count towards my required 10% equity injection?","url":"https://dealroom.so/sba-7a/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-equity"},{"question":"Can the fair market value of equipment I already own and contribute to the acquired business count towards my equity?","url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-equipment-i-already-own-and-contribute-to-the-acquired-busine"},{"question":"Can sweat equity or future services I provide to the business count towards the required equity injection?","url":"https://dealroom.so/sba-7a/questions/can-sweat-equity-or-future-services-i-provide-to-the-business-count-towards-the-required-e"},{"question":"Are pre-closing legal and accounting fees eligible to be counted towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/are-pre-closing-legal-and-accounting-fees-eligible-to-be-counted-towards-my-equity-injecti"},{"question":"Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?","url":"https://dealroom.so/sba-7a/questions/besides-cash-what-non-cash-assets-can-i-contribute-to-meet-the-10-equity-injection-for-an-"},{"question":"Can a substantial pre-paid rent deposit on a commercial lease count towards the equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-substantial-pre-paid-rent-deposit-on-a-commercial-lease-count-towards-the-equity-inj"}],"related_terms":[{"term":"Buyer Equity","url":"https://dealroom.so/glossary/buyer-equity"},{"term":"Cash equity","url":"https://dealroom.so/glossary/cash-equity"},{"term":"Seller's equity","url":"https://dealroom.so/glossary/seller-s-equity"},{"term":"Pre-qualify","url":"https://dealroom.so/glossary/pre-qualify"},{"term":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Non-cash equity","url":"https://dealroom.so/glossary/non-cash-equity"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/besides-cash-and-seller-notes-what-other-buyer-contributions-qualify-for-equity","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}