Glossary · Your money in the deal
Owner Equity
In short
This is the cash you, as the buyer, put into the deal. It's your stake in the business and a key requirement for any SBA loan.
What it means in a deal
For an acquisition, the SBA typically requires a minimum of 10% owner equity injection, though some lenders or deals may require more. This injection must come from unencumbered, seasoned funds. Your owner equity demonstrates your commitment and reduces the lender's risk.
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 Owner Equity
- How is prior owner debt converted to equity treated for injection purposes?
- Can investor funds from non-owner individuals be used for the equity injection?
- How does the SBA view prior owner debt converted to equity for injection purposes?
- What documentation is needed if an institutional investor provides equity but is not an owner?
- What documentation is required if a business owner contributes pre-existing business equipment as equity?
- How does the SBA verify a non-owner investor's funds used for 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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