SBA 7(a) Q&A
Short answer
No, existing cash on hand within the business being acquired cannot be counted towards the buyer's equity injection, regardless of its source.
Equity injection must be new capital brought into the business by the buyer. Existing cash within the business is considered an asset of the business itself, not a new contribution from the buyer, and therefore cannot fulfill the equity injection requirement. The purpose of the injection is to demonstrate the buyer's financial commitment and reduce the overall loan-to-value.
A buyer is acquiring a business for $700,000. The business has $50,000 in its operating account at closing. The buyer still needs to contribute a minimum of $70,000 (10%) from their personal funds or other eligible sources, as the $50,000 is a business asset.
Insider move
Lenders verify that all equity injection funds are from external sources provided by the buyer. They review the business's financial statements and bank accounts to ensure no existing cash is misrepresented as new equity, which could lead to an SBA guaranty repair.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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.
More on what counts toward 10%
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