{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-percentage-of-a-seller-note-that-can-count-towards-my-equity-injection","api_url":"https://dealroom.so/api/public/questions/what-is-the-maximum-percentage-of-a-seller-note-that-can-count-towards-my-equity-injection","question":"What is the maximum percentage of a seller note that can count towards my equity injection?","topic":"Seller notes & equity","audience":"borrower","bot_mode":"buyer","short_answer":"A seller note on full standby can count for up to 50% of the buyer's minimum required equity injection, provided the other 50% is unencumbered cash.","rule":"The SBA typically requires the buyer's minimum equity injection to be 10% of the total project cost. Of this, at least half (5% of total project cost) must be actual unencumbered cash from the buyer. The remaining half (up to 5% of total project cost) can be a seller note on full standby.","example":"For a $2,000,000 business acquisition with a required $200,000 (10%) equity injection, the buyer must inject at least $100,000 in cash. The remaining $100,000 could be a seller note on full standby.","what_lenders_check":"Lenders verify that the buyer provides at least the minimum cash portion of the equity. They ensure the seller note explicitly meets all full standby requirements, including the absence of payments and liens.","required_facts":["Maximum 50%","Full standby","Cash portion","10% minimum","Project cost"],"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":"What if the seller note is not on full standby; can it still count toward equity?","url":"https://dealroom.so/sba-7a/questions/what-if-the-seller-note-is-not-on-full-standby-can-it-still-count-toward-equity"}],"related_terms":[{"term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Acceleration of the Note","url":"https://dealroom.so/glossary/acceleration-of-the-note"},{"term":"Holder of the Note","url":"https://dealroom.so/glossary/holder-of-the-note"},{"term":"Seller standby note","url":"https://dealroom.so/glossary/seller-standby-note"},{"term":"Subordinated Seller Note","url":"https://dealroom.so/glossary/subordinated-seller-note"}],"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/what-is-the-maximum-percentage-of-a-seller-note-that-can-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."]}