{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/for-a-900-000-business-acquisition-what-percentage-of-the-total-required-equity-injection-","api_url":"https://dealroom.so/api/public/questions/for-a-900-000-business-acquisition-what-percentage-of-the-total-required-equity-injection-","question":"For a $900,000 business acquisition, what percentage of the total required equity injection can come from a fully subordinated seller note?","topic":"Seller notes & standby","audience":"borrower","bot_mode":"buyer","short_answer":"A fully subordinated seller note can comprise up to half of the buyer's minimum required equity injection for a business acquisition.","rule":"While the buyer must provide a minimum cash injection (typically 10% of the project costs), the SBA allows a portion of the equity requirement to be met by a fully subordinated seller note. The seller note must be on 'full standby' (no principal or interest payments for the term of the SBA loan or a substantial portion thereof, typically two years minimum) and can account for up to 50% of the total minimum equity injection.","example":"For a $900,000 acquisition, the minimum 10% equity injection is $90,000. The buyer must provide at least $45,000 in cash. The remaining $45,000 could come from a fully subordinated seller note.","what_lenders_check":"Lenders scrutinize the standby terms of the seller note to ensure it meets SBA requirements for subordination and payment restrictions. They verify the buyer's actual cash injection and the seller's commitment to the standby agreement.","required_facts":["Seller note subordination","Equity injection","Minimum cash","Full standby","Percentage limit"],"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":"If a seller takes a fully subordinated note, can they remain an employee or consultant after acquisition?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-takes-a-fully-subordinated-note-can-they-remain-an-employee-or-consultant-afte"},{"question":"Can a seller who takes a fully subordinated note also remain an employee or consultant of the business after the acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-who-takes-a-fully-subordinated-note-also-remain-an-employee-or-consultant-of-"},{"question":"How does an earn-out provision affect an SBA 7(a) loan for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-does-an-earn-out-provision-affect-an-sba-7-a-loan-for-a-business-acquisition"},{"question":"What is the minimum term duration a seller note must be on full standby for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/what-is-the-minimum-term-duration-a-seller-note-must-be-on-full-standby-for-an-sba-loan"},{"question":"Can interest be accrued and paid on a seller note while it is on full standby?","url":"https://dealroom.so/sba-7a/questions/can-interest-be-accrued-and-paid-on-a-seller-note-while-it-is-on-full-standby"},{"question":"Does a seller's post-closing consulting agreement influence their standby note status with the SBA?","url":"https://dealroom.so/sba-7a/questions/does-a-seller-s-post-closing-consulting-agreement-influence-their-standby-note-status-with"}],"related_terms":[{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Business acquisition","url":"https://dealroom.so/glossary/business-acquisition"},{"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/for-a-900-000-business-acquisition-what-percentage-of-the-total-required-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."]}