Glossary · Your money in the deal
Equity
In short
The ownership interest in a business, representing the value remaining after all liabilities are paid. For a buyer, it's the cash or assets directly invested in the deal.
What it means in a deal
Your equity injection is the portion of the purchase price you contribute directly, demonstrating your commitment and reducing the loan-to-value ratio. The SBA requires a minimum equity injection, typically 10-15% of the total project cost. Lenders verify the source and seasoning of these funds to ensure they are genuinely "unencumbered" and not disguised debt.
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 Equity
- Can funds from a home equity line of credit be used for my equity injection?
- Can I use funds from a home equity line of credit for my 10% equity injection?
- How is 'sweat equity' or future services treated for an SBA 7(a) loan equity injection?
- Can sweat equity or future services I provide to the business count towards the required equity injection?
- Can funds from a private equity firm count as equity injection for an SBA 7(a) loan?
- Can a borrower's sweat equity count towards the required equity injection for a 7(a) loan?
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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