SBA loan basics
Short answer
For most business acquisitions, a minimum equity injection (down payment) of 10% to 25% of the total project cost is typically required, with 10% being the most common minimum.
The SBA generally requires a minimum equity injection from the borrower for business acquisitions, usually 10% of the total project cost. However, a higher injection (often 15-25%) may be required by lenders, especially for businesses with high goodwill, limited collateral, or lower cash flow. The equity injection must come from eligible sources and be 'unencumbered.'
To acquire a business for $700,000 with $50,000 in working capital, the total project cost is $750,000. A minimum 10% equity injection would be $75,000. However, the lender might require 15% ($112,500) if the business has a lot of intangible assets.
Insider move
Lenders scrutinize the source and amount of the equity injection to ensure it's truly from the borrower, unencumbered, and sufficient to demonstrate the borrower's commitment. A higher equity injection often signals greater borrower commitment and reduces lender risk.
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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