{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/can-a-seller-financed-portion-of-the-sale-be-considered-part-of-my-equity-injection","api_url":"https://dealroom.so/api/public/questions/can-a-seller-financed-portion-of-the-sale-be-considered-part-of-my-equity-injection","question":"Can a seller-financed portion of the sale be considered part of my equity injection?","topic":"Down payment & equity injection","audience":"new","bot_mode":"buyer","short_answer":"Yes, a seller note can count towards the equity injection if it is on \"full standby\" for the life of the SBA 7(a) loan, meaning no payments are made until the SBA loan is repaid.","rule":"For a seller note to qualify as equity injection for an acquisition, it must be on \"full standby.\" This means no principal or interest payments can be made on the seller note until the SBA 7(a) loan is fully repaid. This demonstrates the seller's continued confidence in the business and reduces the debt burden on the buyer during the SBA loan's term.","example":"A business is being acquired for $1,000,000. The buyer provides $50,000 cash, and the seller takes a $50,000 note that will not be paid until the SBA loan is repaid. This $100,000 total would meet a 10% equity requirement.","what_lenders_check":"Lenders meticulously document the standby agreement to ensure the seller note is fully subordinated and on full standby. They verify that no payments will be made, directly or indirectly, on the seller note during the life of the SBA loan, protecting the SBA's primary lien position.","required_facts":["Seller note","Full standby","Equity injection","No payments"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","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":"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":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-equity-injection"},{"term":"Equity injection verification","url":"https://dealroom.so/glossary/equity-injection-verification"}],"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":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-loans/basics/can-a-seller-financed-portion-of-the-sale-be-considered-part-of-my-equity-injection","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."]}