Glossary · Your money in the deal
Liquid contribution
In short
This is the portion of your equity injection that must be in cash or easily convertible assets, readily available and unencumbered. As a buyer, you care because it's a non-negotiable part of your required down payment.
What it means in a deal
The SBA typically requires a minimum of 5% of the total project costs to come from the buyer as a liquid contribution. These funds must be seasoned (held for at least 90 days) in a bank or brokerage account, or the source of funds must be clearly documented if more recent. This ensures you have real skin in the game.
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 Liquid contribution
- What if my personal financial statement shows low liquid assets?
- What exactly constitutes "unencumbered liquid assets" as a source for the required equity injection?
- 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?
- What percentage of the equity injection must be unencumbered liquid assets for a $1,000,000 business acquisition?
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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