SBA 7(a) Q&A
Short answer
Generally, for most business acquisitions, at least half of the required 10% equity injection must be in cash. The other half can be seller financing on full standby.
SBA rules require a minimum equity injection, typically 10% of the project cost for business acquisitions. While seller notes on full standby can count for up to 5% of the 10% injection, the remaining portion must generally be true cash injected by the buyer. This ensures the buyer has sufficient skin in the game.
For a $1,000,000 business acquisition, a 10% equity injection is $100,000. At least $50,000 must be cash from the buyer. The remaining $50,000 could be a seller note on full standby.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. 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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