SBA loan basics
Short answer
While it varies, a minimum cash injection (down payment) of 10% for business acquisitions is typical, and often higher for startups or specific industries.
The SBA requires borrowers to inject a reasonable amount of equity into the business to demonstrate their commitment and reduce the overall risk. For business acquisitions, 10% is a common benchmark, but lenders may require more depending on the deal structure, industry, and perceived risk. Startups often require higher equity contributions, sometimes 20-30%.
If you are buying an existing business for $500,000, you would typically need to provide at least $50,000 (10%) in cash as your down payment. For a startup, that requirement could be $100,000 for a $500,000 project.
Insider move
Lenders assess the source and sufficiency of the equity injection. They want to ensure the funds are genuinely from the borrower and are not borrowed on terms that would jeopardize the business's ability to repay the SBA 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
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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