SBA 7(a) Q&A
Short answer
For most business acquisitions, the typical cash down payment required for an SBA 7(a) loan is 10-15% of the total project cost. In some cases, it can be higher, up to 25-30%, depending on the business's strength and goodwill component.
The SBA mandates a minimum 10% equity injection for most business acquisitions. However, lenders often require more, especially for deals with a significant 'goodwill' component or those perceived as higher risk. The injection can include cash, eligible seller notes on full standby, or certain other qualified equity sources.
A buyer acquiring a business for $1,000,000 (with $100,000 for working capital) has a total project cost of $1,100,000. A 10% cash down payment would be $110,000. However, the lender might require 15% ($165,000) if the business has a high intangible asset value.
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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