{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-the-seller-leaves-cash-in-the-business-as-part-of-my-post-acquisition-working-capital-d","api_url":"https://dealroom.so/api/public/questions/if-the-seller-leaves-cash-in-the-business-as-part-of-my-post-acquisition-working-capital-d","question":"If the seller leaves cash in the business as part of my post-acquisition working capital, does it count as equity?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"No, cash left in the business by the seller after closing generally does not count towards the buyer's required equity injection.","rule":"Equity injection must come from the buyer's verifiable unencumbered funds or eligible third-party sources. Cash left in the business by the seller, even if intended for working capital, is typically considered a form of seller financing (akin to a seller note) and would need to be on full standby if it were to contribute to the equity requirement.","example":"A buyer acquires a business for $700,000 and needs a $70,000 equity injection. If the seller leaves $30,000 cash in the business post-closing, this $30,000 cannot satisfy the buyer's cash injection requirement. The buyer still needs to inject their own $70,000 (or $35,000 cash + $35,000 standby seller note).","what_lenders_check":"Lenders must ensure that equity injection comes from acceptable sources and is clearly documented as the buyer's contribution. Seller-retained cash or seller financing must meet strict standby requirements to qualify as equity, which 'cash left in the business' typically does not.","required_facts":["Seller-retained cash","Buyer equity source","Standby requirements","Verifiable funds"],"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-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":"Cash flow post-acquisition","url":"https://dealroom.so/glossary/cash-flow-post-acquisition"},{"term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"term":"Business acquisition","url":"https://dealroom.so/glossary/business-acquisition"},{"term":"Revolving working capital","url":"https://dealroom.so/glossary/revolving-working-capital"},{"term":"Working Capital Reserves","url":"https://dealroom.so/glossary/working-capital-reserves"},{"term":"Working capital budget","url":"https://dealroom.so/glossary/working-capital-budget"}],"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-7a/questions/if-the-seller-leaves-cash-in-the-business-as-part-of-my-post-acquisition-working-capital-d","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."]}