SBA 7(a) Q&A
Short answer
An SBA 7(a) loan can finance up to 90% of the total project cost for an acquisition, provided the buyer contributes a minimum 10% equity injection.
SBA rules require a minimum of 10% equity injection for business acquisitions. This means the SBA loan can cover the remaining 90% of eligible project costs, which includes the business purchase price, working capital, and eligible closing costs. If the 10% equity is comprised of 5% buyer cash and 5% seller note on full standby, the loan can still cover 90%.
For a business with a $1,000,000 purchase price and $100,000 in working capital and fees (total $1,100,000 project cost), the buyer must inject at least $110,000 (10%). The SBA 7(a) loan can then finance up to $990,000 (90%) of the total project cost.
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.
More on seller notes & standby
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