For SBA lenders
Short answer
While the SBA does not mandate a specific minimum percentage, it generally expects a reasonable equity injection, typically 10-20% for business acquisitions, to demonstrate the borrower's commitment.
The SBA requires the borrower to have sufficient equity in the business to operate it on a sound financial basis. For business acquisitions, a minimum of 10% is generally expected, and higher for certain circumstances or industries. Lenders must document the source and verification of the equity injection funds.
A borrower is acquiring a business for $1,000,000. The lender underwrites the deal with a 15% equity injection, meaning the borrower must contribute $150,000. This injection could be cash, a fully subordinated seller note, or a combination.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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