The equity injection is the buyer's required down payment on an SBA change-of-ownership loan, a minimum of 10% of the total project cost under SOP 50 10 8. Up to half of that 10% can come from a seller note on full standby, so your own cash can be as little as 5% of the price.
On a $1,000,000 deal
| Component | Amount |
|---|---|
| Total injection (10%) | $100,000 |
| , Your cash (min. half) | $50,000 |
| , Standby seller note (max half) | $50,000 |
The injection must be in place at close and typically can't be borrowed against the business itself.
Why it matters when buying a business
The injection is the biggest cash hurdle for first-time buyers, and the standby-note allowance is the lever that halves it. Lenders will trace the source of your cash, so plan it early. A larger injection also shrinks the loan and improves your DSCR.
