SBA 7(a) Q&A
Short answer
Your cash equity injection must be fully injected and verified by the lender before or at the time of loan closing. Funds cannot be contingent or provided post-closing.
The SBA requires that all equity injection funds be verified as coming from eligible sources and be in the borrower's control prior to or at the time of loan closing. This ensures the borrower has their committed capital in the business from day one, demonstrating commitment and reducing lender risk.
If you are buying a $1,000,000 business and need to inject $100,000 cash, the lender will require bank statements showing those funds were moved into the business account or escrow and are available by the closing date.
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
SBA 7(a) Loans Overview
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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