Glossary · Your money in the deal
Equity Contribution
In short
This is the money you, the buyer, put into the deal from your own funds. It's your "skin in the game" and a key requirement for an SBA loan.
What it means in a deal
The SBA requires a minimum equity injection, typically 10% of the total project costs, though some deals may need more. This must come from eligible sources like seasoned funds, a gift, or a seller-financed portion on full standby. Lenders will verify the source and seasoning of these funds.
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 Contribution
- Can the seller's contribution of working capital count towards my minimum equity injection?
- Can an institutional investor's cash contribution count towards my SBA 7(a) equity injection?
- What is the typical down payment or equity contribution required for an SBA 7(a) loan?
- Can a seller note be used to finance the entire seller's equity contribution to the buyer's business?
- Besides cash and seller notes, what other buyer contributions qualify for equity?
- What forms of non-cash contributions can count towards the equity injection?
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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