SBA loan basics
Short answer
The down payment, or equity injection, for an SBA 7(a) loan is typically a percentage of the total project cost, usually between 10% to 25%, determined by the deal type and the lender's assessment of risk.
SBA policy generally requires an equity injection from the borrower to demonstrate commitment and mitigate risk. While the SBA doesn't mandate a specific percentage for all loans, lenders typically require 10-25% of the total project cost, with higher percentages for riskier ventures like startups or businesses with less collateral. For business acquisitions, 10% is a common minimum, but often 15% or more is preferred by lenders.
An entrepreneur purchasing an existing business for $500,000 with $50,000 for working capital (total project cost $550,000) might be required to make a 10% down payment, totaling $55,000. If the business is a startup or deemed higher risk, the lender might require a 20% down payment, or $110,000.
Insider move
Lenders view a substantial equity injection as a sign of the borrower's commitment and a cushion against initial setbacks. They verify the source of funds to ensure it's truly the borrower's 'at risk' capital and not borrowed funds that would increase overall debt burden.
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.
More on what the down payment is
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