SBA 7(a) Q&A
Short answer
For a business acquisition, the SBA typically requires a minimum of 10% of the total project costs as equity injection, which may include cash.
While the overall equity injection is 10%, the SBA prefers a significant portion to be actual cash. If the injection includes a standby seller note, the borrower may still need to provide a cash component to satisfy the lender's comfort level and SBA's prudent lending standards.
For a $1,000,000 business purchase, a $100,000 equity injection is required. A lender might want at least $50,000 of that to be the buyer's actual cash, with a standby seller note making up the remaining $50,000.
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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