Zero down: what still works
One structure still reaches true $0 down. Three more get close. Here's each one, with the rule that makes it legal.
Last reviewed June 2026 · Written against SOP 50 10 8 and current SBA notices
$0
Partner buyouts (still legal)
5%
Cash floor, full purchase
50%
Max injection via seller note
9:1
Debt-to-worth test
The zero-down play that died
Before June 2025, a seller note on 24-month standby could cover the entire 10% injection. Buyers closed full purchases with no cash. SOP 50 10 8 ended it: a seller note now counts toward the injection only on full standby for the life of the loan — no payments at all for 10 years — and only up to half the requirement. Date-check any advice you read against June 1, 2025.
The floor, cited
| Complete change of ownership | 10% of total project costs, minimum |
|---|---|
| Seller note on lifetime full standby (SBA Form 155) | Counts, capped at 5 of the 10 points |
| Seller note with any payments | Counts toward nothing — it's still useful financing |
| Your minimum cash or assets | 5% of total project costs |
| Verification | ~2 months of bank statements tracing source and movement |
Seller financing is still the cornerstone of every low-cash structure. A standby note halves your cash requirement, shrinks the bank loan, and tells the lender the seller believes the business can pay.
The four plays, ranked by how close to $0 you get
| 1. Partner buyout — true $0 | Buy out a co-owner with no injection at all: remaining owners certify 24+ months of active participation at the same or higher stake, and post-deal debt-to-worth is 9:1 or better. Loans over $500K financing >90% of the price require that certification on Form 1919. |
|---|---|
| 2. Partial purchase — under 10% | Buy a piece of the company (equity purchase only) with less than 10% down when the 9:1 debt-to-worth test passes. Every equity holder guarantees for 2+ years, including the seller. |
| 3. Other people's 5% — your $0 | Gifts and investor cash count as injection. A documented gift letter or an investor funding the 5% means your personal savings stay untouched. Investors at 20%+ must guarantee. |
| 4. ROBS — $0 from savings | Roll your 401(k)/IRA into the deal through a ROBS structure. It's your money working without an early-withdrawal penalty, and it counts as injection. |
Marry the standby note to any play and the cash need drops again.
Closing with more cash than you put in
You cannot pocket loan proceeds at closing — 13 CFR 120.130 bars paying the buyer from a 7(a). The legal version runs through the business: working capital is an eligible use of proceeds (13 CFR 120.120), so the loan can fund the company's bank account on day one.
| Your cash in (5%) | $82,500 — half the injection on a $1.65M total project |
|---|---|
| Seller standby note (5%) | $82,500 — full standby, life of loan |
| SBA loan | $1,485,000 — includes $150K working capital + fees financed |
| Business bank account, day one | $150,000 |
| Cash in the company vs your check | $67,500 more than you wrote |
Add a salary from day one and seller transition support, and your household cash flow turns positive in month one. The money sits in the business, where the rules want it — and where it pays you.
Make the file strong where it's thin
Low-cash files get approved when the coverage is fat. Target deals where cash flow covers the full debt stack at 1.5x or better — use the 1.5x+ coverage filter — and bring industry experience the lender can see. Thin cash plus thin coverage gets declined everywhere.
Zero-down questions, answered
Can you get an SBA loan with no money down in 2026?
For a complete business purchase, no — SOP 50 10 8 (effective June 1, 2025) requires a 10% equity injection, and at least half must be cash or assets. A partner buyout is the exception: buying out a co-owner can reach true $0 down when the remaining owners certify 24+ months of active participation and the business's debt-to-worth stays at or under 9:1.
Can a seller note cover the whole SBA down payment?
Not anymore. A seller note counts toward the 10% injection only on full standby — zero payments — for the entire life of the loan, and it can cover at most half (5 of the 10 points). The old 24-month-standby rule ended June 1, 2025.
Can the down payment be a gift or investor money?
Yes. Documented gifts and outside investor cash both count toward the injection. Your personal savings can be $0. Any investor owning 20% or more must personally guarantee the loan.
Can I take cash out at closing on an SBA loan?
Not personally — 7(a) proceeds can't be paid to the buyer at closing (13 CFR 120.130 restricts uses of proceeds). But the loan can finance working capital, so the business itself can legally hold more cash on day one than you injected.
Free · No obligation · Usually same-day
Stop reading. Ask a lender.
Twenty minutes with an SBA specialist answers what twenty articles can't: your number, on yourtimeline. We'll connect you with a 7(a) specialist who works acquisition deals all day — they'll tell you what you can borrow before you fall in love with a listing.
Sellers answer verified buyers first
Verification takes minutes, costs nothing, and moves you to the front of every advisor's queue — they see proof of funds before you even say hello.
Become a verified buyerFirst look at every new listing
The gems never sit on the open market. Premium members see each new listing before the crowd — by the time everyone else is browsing, you've already made the call.
$29/mo · instant alerts · side-by-side deal compare · priority with advisors
Upgrade to Premium