Glossary · Reading the business
In short
One of the "5 Cs of Credit," referring to the borrower's equity injection and overall financial strength. It shows your personal commitment to the business and its ability to withstand financial shocks.
Lenders want to see you have skin in the game. Your equity injection, typically 10-20% of the total project costs, demonstrates this. They also assess your personal liquidity and net worth to ensure you have reserves beyond the down payment, should the business face unexpected challenges.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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