SBA 7(a) Q&A
Short answer
You must personally inject at least 10% of the project cost, which can be entirely cash or a combination of cash and eligible non-cash assets.
For a change of ownership, the buyer is required to inject a minimum of 10% of the total project cost. At least half of this 10% (i.e., 5% of the total project cost) must typically be unencumbered cash or cash equivalents from the borrower's personal funds. The other half can be from seller notes on full standby.
If the total project cost for a business acquisition is $1,000,000, the minimum equity injection is $100,000. Of this, at least $50,000 must be your personal cash, with the remaining $50,000 potentially coming from a standby seller note.
Insider move
Lenders rigorously verify the source and liquidity of the cash injection, ensuring it is unencumbered and directly from the buyer. They trace the funds to confirm the transfer to the business or escrow account.
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.
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