SBA loan basics
Short answer
Yes, besides cash, an equity injection can sometimes include eligible seller notes on full standby, or existing business assets. However, a significant cash component is usually preferred and often required.
The SBA generally requires at least 10% equity injection for business acquisitions. This can be met with cash, a seller note (where the seller delays payment and accepts no payments for the life of the SBA loan), or other assets valued at fair market value. For seller notes, they must be on 'full standby' for the life of the SBA loan, meaning no payments are made to the seller.
A buyer is purchasing a business for $1,000,000. Instead of putting down $100,000 cash, they might contribute $50,000 cash and have the seller provide a $50,000 promissory note that is on full standby for the entire term of the 7(a) loan.
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 2026-06-14. 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.
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