SBA loan basics
Short answer
Yes, an equity injection (often called a 'down payment') is generally required for an SBA 7(a) loan, particularly for business acquisitions or startups.
The SBA requires borrowers to inject a reasonable amount of their own capital into the business to demonstrate commitment and mitigate risk. For business acquisitions, the minimum equity injection is typically 10% of the total project costs, though some situations may require more, such as 15% or even 20% if there is substantial goodwill or limited collateral.
A borrower acquiring a business for $1,000,000 with total project costs of $1,100,000 (including working capital and fees) would need to inject at least $110,000 (10%) of their own cash or eligible assets.
Insider move
Lenders scrutinize the source and verification of the equity injection to ensure it is unencumbered and truly from the borrower's own resources. They must ensure the equity injection meets SBA's minimum percentage requirements for the specific transaction type.
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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