SBA 7(a) Q&A
Short answer
Typically, a minimum of 10% of the total project cost is required as equity injection, with at least half of that being from the buyer's unencumbered cash.
SBA rules generally require a minimum 10% equity injection for a change of ownership. For an acquisition, at least 5% of this 10% must come from the borrower's personal, unencumbered cash. The remaining 5% can come from other eligible sources, such as a fully-standby seller note or investor funds.
For a $1,000,000 acquisition, the total project cost might be $1,100,000 including fees and working capital. A 10% equity injection would be $110,000. At least $55,000 must be your personal cash, with the rest potentially a standby seller note or other eligible funds.
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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