The equity injection is the buyer's own verified contribution to a financed business purchase, required by the SBA program as a percentage of total project cost.
What is the SBA 7(a) equity injection?
The equity injection is the money the buyer brings to the closing table that is not borrowed against the business. SBA requires it on a complete change of ownership because a buyer with nothing of their own in the deal has nothing to lose by walking away from it, and the guarantee the agency stands behind is priced on the assumption that the buyer stays.
Under SOP 50 10 version 8, the program's origination rulebook effective June 1, 2025, the minimum injection on a complete change of ownership is 10 percent of total project cost. Total project cost is not the purchase price. It is the price plus the working capital, closing costs, lender fees, and any equipment or improvements the loan funds, which is why the sources-and-uses schedule has to be finished before the injection can be calculated.
The 10 percent is a program floor. A lender may require more on a thinner file, a riskier industry, or a first-time buyer, and many do. The SBA 7(a) requirements for buying a business explain the difference between a program rule, a condition of the specific deal, and a lender's own credit policy, and the injection is the place that difference costs the most.
Where can the injection come from?
From the buyer, in a form the lender can verify. Seasoned funds in the buyer's own accounts are the simplest source: money that has sat in one place long enough that the statements show it was not borrowed the week before. Gifts work when the giver documents that the money is a gift and shows the capacity to give it. Home equity works when the repayment of that borrowing does not depend on the business being bought. Retirement funds can be used through a rollover structure that has its own rules and its own advisers.
What does not work is a promissory note from a friend, a gift letter with no bank statement behind it, or money that appears in the account the month of the application. The lender has to keep evidence of the source, and an injection that cannot be traced is one of the common reasons an otherwise sound file is declined.
The practical rule is simple. Move the injection into one account at least two months before you apply, and then leave it alone.
Can a seller note count toward the injection?
Yes, within limits. Under SOP 50 10 version 8, a seller note that is placed on full standby for the life of the loan can count toward the required injection, up to half of it. Full standby means the seller receives no principal and no interest on the note until the SBA loan is repaid. A note that pays the seller monthly is not on standby and does not count, however it is labelled.
That rule changes the negotiation. A buyer who needs a seller note to reach the injection has to have the standby terms agreed in the letter of intent, because a seller who signs a purchase agreement expecting payments and is asked at closing to sign a standby agreement has every reason to refuse. The seller standby note page covers what the seller is being asked to give up and how to make that ask early.
How does the injection interact with the rest of the stack?
The injection is one layer of the capital stack described in the financing guide. The order in a typical file is the buyer's cash, then the seller note on standby if there is one, then the senior 7(a) loan for the balance. The lender sizes its loan on the coverage the business shows, not on what is left after the other layers, so a buyer who assumes the lender fills whatever gap remains is usually surprised.
Run the numbers in that order. Start with the coverage the business can support after a real owner salary, size the senior loan to that, decide what the seller will carry on standby, and only then read off what the injection has to be. If the injection that falls out is more than you have, the price is the problem, not the lender.
What changes on October 1, 2026?
SBA lists SOP 50 10 version 8.1 as effective October 1, 2026. A loan that receives its SBA number on or after that date is underwritten under 8.1, and the equity and seller-note rules are among those most likely to be revised between versions. This page states the version 8 rules and carries the date the check expires. If your closing could fall near that boundary, ask the lender in writing which version governs the file and what the injection requirement is under it.
What should a buyer do about the injection this week?
Three things. Finish the sources-and-uses schedule, because the injection is a percentage of a total that does not exist until the schedule does. Move the cash into one account and stop touching it. And write the standby terms into the letter of intent if a seller note is part of the plan, so the seller agrees to the structure before anyone has spent money on lawyers.
Then run the whole structure through the debt coverage check with your own salary in it. The injection buys you the loan. Coverage is what lets you keep the business.
Questions people ask next
Is the equity injection the same as a down payment?
Close, but it is measured on total project cost rather than on price, so it includes the working capital, closing costs, and fees the loan funds. A buyer who calculates 10 percent of the price alone will be short.
Can I borrow the equity injection?
Only from a source whose repayment does not depend on the business being bought, such as a home equity line with an outside repayment source, and only with documentation. Money that appears in the account the month of the application, or a promissory note from a friend, does not work.
Can a gift count?
Yes, when the giver documents that it is a gift and shows the capacity to give it. A gift letter alone, without the giver's statements, is not enough for the lender's file.
Does the rule change on October 1, 2026?
It may. SBA lists SOP 50 10 version 8.1 as effective that day, and the equity and seller note rules are among those most likely to move. Confirm the governing version with the lender in writing.
Sources
- SBA SOP 50 10, Lender and Development Company Loan Programs (versions 8 and 8.1) Primary source. Read 2026-09-08.
- SBA 7(a) loans program page Primary source. Read 2026-09-08.
- Official Business Doctor, SBA 7(a) loan requirements for buying a business Secondary source. Read 2026-09-08.
Program rules on this page were checked against SOP 50 10 version 8 on 2026-09-08 and are current through 2026-09-30. Confirm the version that governs your application with the lender.