SBA 7(a) Q&A
Short answer
Generally, a significant portion of your required equity injection must be in cash. While non-cash contributions can count, the SBA typically looks for a direct cash injection to ensure the buyer has liquid funds at risk.
The SBA requires a minimum equity injection, usually 10-20% of the project cost for an acquisition. While non-cash assets (like real estate or equipment) can be included, the lender often requires a minimum of 50% of the total equity injection to be in cash to demonstrate liquidity and commitment. This isn't a hard SBA rule but a common prudent lending practice.
If a business acquisition costs $1,000,000 and requires a $100,000 equity injection, a lender might require at least $50,000 of that to be cash, even if you contribute $50,000 in personal real estate equity.
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.
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