Glossary · Your money in the deal
Equity Gap
In short
This is the difference between the total acquisition cost and the maximum loan amount you can secure. It's the portion of the deal you need to cover with your own funds or other non-loan sources.
What it means in a deal
If your total project costs exceed what the SBA 7(a) loan will cover, you have an equity gap. This gap must be filled by your equity injection, a seller note on full standby, or other approved capital contributions. Lenders need to see this gap fully covered before approving the loan.
Official sources
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 Gap
- 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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