{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-the-seller-s-payment-of-closing-costs-on-my-behalf-count-towards-my-equity-injection","api_url":"https://dealroom.so/api/public/questions/can-the-seller-s-payment-of-closing-costs-on-my-behalf-count-towards-my-equity-injection","question":"Can the seller's payment of closing costs on my behalf count towards my equity injection?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"No, generally, the seller paying your closing costs cannot be counted as part of your equity injection. Equity injection must come from the buyer or approved third parties at risk.","rule":"Equity injection must be funds or assets contributed by the buyer or an eligible third party that is truly 'at risk' in the business. Payments made by the seller, even if benefiting the buyer, are typically considered a reduction in the effective purchase price rather than an equity injection from the buyer's side. The SBA's intent is for the buyer to put their own funds or approved third-party funds into the deal.","example":"If you agree to buy a business for $500,000 and the seller offers to pay your $10,000 in legal closing costs, that $10,000 cannot be used to satisfy your required $50,000 cash injection. You would still need to provide the full $50,000 from your own eligible sources.","what_lenders_check":"Lenders will scrutinize all sources of funds for the equity injection to ensure compliance with SBA rules, which emphasize the buyer's genuine 'at risk' contribution. Seller contributions are generally viewed as part of the overall transaction terms, not buyer equity.","required_facts":["Source of funds","Buyer's equity injection","Seller contributions","Closing costs","At risk funds"],"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 I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/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-7a/questions/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Seller's equity","url":"https://dealroom.so/glossary/seller-s-equity"},{"term":"Closing Costs","url":"https://dealroom.so/glossary/closing-costs"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Loan closing costs","url":"https://dealroom.so/glossary/loan-closing-costs"},{"term":"Lender closing costs","url":"https://dealroom.so/glossary/lender-closing-costs"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"}],"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-the-seller-s-payment-of-closing-costs-on-my-behalf-count-towards-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."]}