For an SBA 7(a) business-acquisition loan, the minimum down payment, the "equity injection", is 10% of the total project cost. On a $500,000 acquisition that's $50,000. At least half of that 10% must be the buyer's own cash; the other half can sometimes come from a seller note on full standby. Compared with the 20 to 30% many conventional lenders want, 10% is why the SBA 7(a) is the workhorse loan for small-business buyers.
How the 10% works
Since the SBA's rule changes, most 7(a) acquisition loans require a minimum 10% equity injection based on total project cost, not just the purchase price. Total project cost can include the business price, working capital, closing costs, and any fees rolled into the loan. The SBA guarantees a portion of the loan to the lender; the equity injection is your skin in the game.
| Source | Amount | Notes |
|---|---|---|
| Buyer cash (minimum) | $25,000 | At least 5% must be genuine buyer equity |
| Seller note on full standby | $25,000 | Up to half the injection, if it qualifies |
| Total equity injection | $50,000 | 10% of project cost |
| SBA 7(a) loan | $450,000 | Balance financed |
What counts as your injection
Lenders verify the source of funds, so the money has to be traceable and legitimately yours. Common sources:
- Personal cash savings, seasoned in your account and shown on statements.
- A gift from family, documented with a gift letter.
- Retirement rollover (ROBS), using 401(k)/IRA funds without an early-withdrawal penalty.
- Home equity (HELOC), allowed by many lenders, though it adds a payment; policies vary.
- A qualifying seller note, only on full standby, and only for up to half the injection.
See the full mechanics in our guide to the SBA down payment and equity injection, and run your own numbers with the SBA loan calculator.
Can the seller fund part of it?
Yes, a seller note can count toward your down payment, but only under strict conditions: it must be on full standby (no payments for at least 24 months, documented on SBA Form 155), and it can cover no more than half of the required 10%. The buyer still contributes the other 5% in real cash.
Frequently asked questions
A minimum of 10% of total project cost for a 7(a) acquisition loan. On a $500,000 deal that's $50,000, at least half of which must be your own cash.
Yes, but only on full standby (no payments for 24 months, SBA Form 155) and only for up to half the 10% injection. You still need to bring the other 5% in cash.
At least half must be genuine equity, cash, a documented gift, or a retirement rollover. Lenders verify source of funds, so the money must be traceable and yours.
