Glossary · Your money in the deal
Non-cash equity
In short
This is a portion of your down payment that isn't actual cash, such as a seller note on full standby or a buyer's existing business assets contributed to the new entity.
What it means in a deal
The SBA allows a portion of your required equity injection to be non-cash, often in the form of a seller note on full standby. This means the seller gets paid *after* the SBA loan is fully repaid. Clearly define any non-cash equity with your lender to ensure it meets SBA rules for eligibility.
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 Non-cash equity
- What forms of non-cash contributions can count towards the equity injection?
- What types of non-cash assets qualify for an SBA 7(a) equity injection?
- Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?
- What non-cash forms of equity injection are acceptable for an SBA 7(a) loan?
- What type of independent valuation is required for non-cash assets to count as equity injection?
- Can I use appraised business equipment or other non-cash assets as part of my 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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