SBA loan basics
Short answer
The minimum equity injection (down payment) for an SBA 7(a) loan typically ranges from 10% to 20% of the project cost, though it can vary based on the specific loan purpose and lender's assessment.
SBA requires an equity injection from the borrower to demonstrate their personal stake and commitment to the business. While the SBA generally looks for a minimum of 10% cash injection for most acquisitions, lenders may require more depending on the deal structure, industry, and perceived risk.
If you are buying a business for $1,000,000, you will generally need to provide at least $100,000 (10%) of your own funds as equity. Some lenders might require $150,000 (15%) or $200,000 (20%) based on their specific risk assessment for that particular business.
Lenders verify the source and sufficiency of the equity injection to ensure it is not borrowed or from unacceptable sources. They want to see genuine owner investment and commitment, as it significantly impacts the borrower's motivation and the business's financial stability.
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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