SBA 7(a) Q&A
Short answer
No, a seller's retained equity stake does not count towards the buyer's required 10% equity injection. The equity injection must come from the buyer or eligible third parties.
The SBA requires the buyer to inject new equity into the business. The seller's retained equity represents their existing ownership, not a new injection by the buyer. The 10% rule specifically applies to the funds the new owner brings to the transaction.
If you are buying 80% of a business for $800,000, and the seller retains 20% equity, your minimum cash equity injection is $80,000 (10% of $800,000). The seller's retained 20% does not reduce your required injection.
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 the 10%
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