SBA 7(a) Q&A
Short answer
The SBA generally requires a minimum of 10% equity injection from the buyer for business acquisitions. This 10% must typically be in cash, but certain non-cash assets or seller financing on full standby can contribute.
SBA rules require that the borrower inject at least 10% of the total project costs as equity. For changes of ownership, a minimum of 10% tangible equity injection must come from the borrower. This includes cash equity, and if seller financing is used, it must be on full standby for the life of the SBA loan to count towards this 10%.
If you are acquiring a business for $1,000,000, the minimum required equity injection is $100,000. This could be $50,000 cash from you and a $50,000 seller note on full standby.
Lenders verify the source and sufficiency of the equity injection to ensure compliance with SBA requirements, particularly distinguishing between cash, acceptable non-cash assets, and fully subordinated seller notes. They want to see genuine borrower commitment.
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 2026-06-14. 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 down payment & equity injection
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day