Glossary · Your money in the deal
Equity Interest
In short
This represents your ownership stake in a business. For an SBA loan, you must show a sufficient equity interest (down payment) in the deal.
What it means in a deal
The SBA generally requires a minimum equity injection from the buyer, typically 10-20% of the total project costs, to demonstrate your commitment. This equity can come from cash, seasoned funds, or sometimes a seller note on full standby. Lenders verify the source 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 Interest
- Can a seller note with deferred payments but no interest count as full standby for equity injection?
- Can I use a seller note that pays interest only for the first two years towards my equity injection?
- What happens to the interest rate on an SBA 7(a) loan if general market interest rates go down significantly?
- Can a full standby seller note be interest-bearing if interest is deferred until after the SBA loan is repaid?
- What is the difference between a fixed interest rate and a variable interest rate on an SBA 7(a) loan?
- How are SBA 7(a) loan interest rates determined?
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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