SBA loan basics
Short answer
Yes, an equity injection, similar to a down payment, is usually required for SBA 7(a) loans, especially for business acquisitions or startups. The minimum is typically 10%.
The SBA requires borrowers to contribute a reasonable amount of equity to the project, demonstrating personal commitment and reducing lender risk. For business acquisitions, a minimum of 10% of the total project costs (purchase price plus fees, working capital) is generally mandated, which can come from verified personal cash, certain seller notes, or other approved sources.
If the total cost to acquire a business, including fees and initial working capital, is $750,000, the buyer would typically need to provide at least $75,000 (10%) as an equity injection.
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 Form 1919 - Borrower Information Form
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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