Glossary · Your money in the deal
At-Risk Equity
In short
This is the portion of your equity injection into the business that cannot be withdrawn or paid back to you for a period, typically two years. It's the buyer's true cash commitment to the deal.
What it means in a deal
The SBA requires a minimum equity injection, and a significant portion must be "at-risk." This means you can't fund it with a loan that isn't on full standby or immediately take it back out. Your lender will verify these funds are unencumbered and committed to the business.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about At-Risk Equity
- Is a personal guaranty required from every owner with at least 20% equity in the acquiring business?
- Are there specific circumstances where a seller's equity in the business must be fully paid out at closing?
- If I contribute existing equipment valued at $50,000 to the acquired business, can it count towards my equity injection?
- Can I use a portion of the business's existing cash on hand at closing towards my equity injection, if it's not from the seller?
- Can a 7(a) loan be used to pay out a portion of the seller's equity at closing, even if they remain a minority owner?
- What happens if the business being acquired has significant outstanding tax liabilities at closing?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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