SBA loan basics
Short answer
A down payment, or equity injection, is the borrower's own funds or assets contributed to a project, like buying a business or property. It's required to show the borrower's commitment and to reduce the lender's and SBA's risk.
The SBA requires an equity injection to ensure the borrower has a personal stake in the business's success, demonstrating commitment and a willingness to share in the risk. It also helps to establish a healthier debt-to-equity ratio, making the business more financially stable.
If you are buying a business for $1 million, an SBA 7(a) loan might cover $900,000, meaning you would need to provide a $100,000 down payment (10%) from your own qualified sources.
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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