{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/can-a-seller-financed-portion-of-an-acquisition-count-as-my-down-payment","api_url":"https://dealroom.so/api/public/questions/can-a-seller-financed-portion-of-an-acquisition-count-as-my-down-payment","question":"Can a seller-financed portion of an acquisition count as my down payment?","topic":"Down payment & equity injection","audience":"new","bot_mode":"buyer","short_answer":"Yes, a seller-financed portion of an acquisition can count towards the buyer's equity injection (down payment), provided it is on 'full standby' terms.","rule":"Similar to loans from relatives, a seller note can be considered part of the equity injection if it is on 'full standby' for the entire term of the SBA loan. This means the seller agrees to receive no payments (principal or interest) until the SBA loan is fully repaid, ensuring that the business's cash flow is directed towards the senior SBA debt.","example":"If a business is being acquired for $700,000, and the buyer provides $70,000 (10%) cash, the seller could finance another $70,000 (10%) through a standby note. This would give the buyer a total equity injection of $140,000 (20%), making the deal more appealing to lenders.","what_lenders_check":"Lenders meticulously review the standby agreement for the seller note, ensuring it explicitly states no payments will be made until the SBA loan is satisfied. They also consider the seller's ongoing involvement, if any, and the valuation of the business.","required_facts":["Seller financing","Full standby required","No payments to seller","Equity injection","Business acquisition"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","7(a) Loan Program Terms, Conditions, and Eligibility","13 CFR Part 120 - Business Loans"],"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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-loans/basics/can-i-use-retirement-funds-from-a-401-k-as-equity-injection-for-a-750-000-business-purchas"},{"question":"Can funds from a home equity line of credit (HELOC) be used as my equity injection for a business acquisition?","url":"https://dealroom.so/sba-loans/basics/can-funds-from-a-home-equity-line-of-credit-heloc-be-used-as-my-equity-injection-for-a-bus"},{"question":"Is it possible to use a second mortgage on my personal residence as an equity injection for a $1.5 million business acquisition?","url":"https://dealroom.so/sba-loans/basics/is-it-possible-to-use-a-second-mortgage-on-my-personal-residence-as-an-equity-injection-fo"},{"question":"How much cash must I personally inject for an SBA 7(a) business acquisition?","url":"https://dealroom.so/sba-loans/basics/how-much-cash-must-i-personally-inject-for-an-sba-7-a-business-acquisition"},{"question":"What are the acceptable sources for my cash equity injection beyond personal savings?","url":"https://dealroom.so/sba-loans/basics/what-are-the-acceptable-sources-for-my-cash-equity-injection-beyond-personal-savings"},{"question":"What is the SBA's minimum required equity injection percentage for a business acquisition?","url":"https://dealroom.so/sba-loans/basics/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Seller-Financed Portion","url":"https://dealroom.so/glossary/seller-financed-portion"},{"term":"Down payment","url":"https://dealroom.so/glossary/down-payment"},{"term":"Seller's equity","url":"https://dealroom.so/glossary/seller-s-equity"},{"term":"Unguaranteed portion","url":"https://dealroom.so/glossary/unguaranteed-portion"},{"term":"Guaranteed Portion","url":"https://dealroom.so/glossary/guaranteed-portion"},{"term":"Acquisition","url":"https://dealroom.so/glossary/acquisition"}],"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-loans/basics/can-a-seller-financed-portion-of-an-acquisition-count-as-my-down-payment","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."]}