{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-equity","api_url":"https://dealroom.so/api/public/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-equity","question":"Can renovation costs for an acquired business premises count towards my required 10% equity injection?","topic":"What counts toward the 10%","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, certain renovation costs paid by the buyer can count towards the equity injection if they are directly related to the business acquisition and part of the total project costs.","rule":"Equity injection must be unencumbered and from the borrower. Renovation costs incurred and paid by the buyer pre-closing, which are essential for the business to operate or improve its value, can be considered part of the project costs that the equity injection covers. Documentation of payments and relation to the project is crucial.","example":"A buyer purchases a $500,000 business and immediately plans $50,000 in necessary renovations. If the buyer pays $25,000 of these renovation costs from their personal funds before closing, this $25,000 can count towards the required 10% equity injection.","what_lenders_check":"Lenders will require invoices and proof of payment for the renovation costs, ensuring they are legitimate and were paid from the buyer's unencumbered personal funds or other eligible equity sources.","required_facts":["Renovation costs","Buyer paid funds","Project costs","Proof of payment"],"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 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"},{"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-"}],"related_terms":[{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Renovation","url":"https://dealroom.so/glossary/renovation"},{"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/can-renovation-costs-for-an-acquired-business-premises-count-towards-my-required-10-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."]}