SBA 7(a) Q&A
Short answer
Yes, reasonable and customary pre-closing expenses paid by the buyer can be included as part of the total project cost and may count toward the equity injection. These include appraisal, environmental, or legal fees.
The SBA allows for the inclusion of certain eligible pre-closing expenses in the total project cost, against which the equity injection percentage is calculated. These expenses must be directly related to the acquisition and properly documented.
A buyer pays $5,000 for a business valuation and $3,000 in legal fees prior to closing. If the required equity is $50,000, these $8,000 can reduce the cash required to $42,000.
Insider move
Lenders verify that the fees are for eligible purposes, are reasonable in amount, and have been actually paid by the borrower from unencumbered sources, with proper documentation.
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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