SBA loan basics
Short answer
For most SBA 7(a) loans, especially for business acquisitions, a minimum cash down payment (equity injection) of 10% of the total project cost is typically required, though some situations may require more.
The SBA generally requires an equity injection from the borrower to demonstrate their commitment to the business. For acquisitions, the minimum cash injection is usually 10%, but factors like profitability, collateral, or a seller note on full standby can sometimes allow for a lower cash injection, provided the total equity injection meets SBA requirements.
A buyer is acquiring a business for $1,000,000. They would typically need to provide at least $100,000 as a cash down payment. If the seller provides a $50,000 standby note, the buyer's cash injection might be reduced to $50,000, for a total of 10% equity.
Insider move
Lenders verify the source and availability of the equity injection funds. They ensure the funds are unencumbered and truly from the borrower, showing commitment and reducing the lender's risk.
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 2026-06-14. 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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