Glossary · Your money in the deal
Capital at Risk
In short
This refers to the cash equity you inject into the business, plus any seller financing that is fully subordinated to the SBA loan. It's the portion of your investment that is not protected by senior debt.
What it means in a deal
The SBA requires borrowers to have "capital at risk" in the deal, typically at least 10% of the total project cost. This shows your commitment and skin in the game. Ensure your down payment and any seller note meet the SBA's specific requirements for subordination to qualify as capital at risk.
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 Capital at Risk
- What if the business I'm acquiring has significant negative working capital at closing?
- How does negative working capital at the time of acquisition impact SBA 7(a) loan eligibility?
- Is working capital from an SBA loan available immediately at closing for operational expenses and payroll?
- Can an existing business with significant negative working capital at closing still be eligible for a 7(a) acquisition loan?
- Can an SBA 7(a) working capital loan be used to pay off existing accounts payable of the acquired business at closing?
- 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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