SBA 7(a) Q&A
Short answer
It depends on the deal structure, but typically buyers must personally contribute at least 5% of the total project costs in cash for an acquisition.
The SBA generally requires a minimum equity injection of 10% of the total project costs for business acquisitions. For a change of ownership, at least 10% must be injected, and at least half of that (5% of the total project costs) must be from the buyer's own cash. The remaining 5% can come from a seller note on full standby or other acceptable forms of equity.
For a $1,000,000 acquisition (including purchase price, working capital, fees), the total equity injection must be at least $100,000. The buyer must personally contribute at least $50,000 in cash, while the remaining $50,000 could be a fully subordinated seller note.
Lenders verify the source and sufficiency of the buyer's cash injection to ensure it's unencumbered and represents real commitment. They also ensure that any non-cash equity or seller notes meet strict standby requirements.
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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