# The SBA equity injection: questions and answers **Short answer:** This page lists 15 answers on the SBA equity injection. Each gives the rule first and names the SBA source it rests on. Canonical page: https://www.sbaexpress.loans/answers/equity-injection/ Last checked: 2026-11-08 These answers cover how much of your own money a loan requires, what counts toward it, and how a lender checks it. ## All 15 answers on the SBA equity injection Each entry gives the short answer. Open it for the full explanation and its sources. ### [How much equity injection does an SBA 7(a) loan require?](https://www.sbaexpress.loans/answers/how-much-equity-injection-does-a-7a-loan-require/) It depends on the use. Start-ups must inject at least 10% of total project costs. An Initial Acquisition requires 10%, which cannot be reduced or eliminated. Other existing-business loans have no set SBA percentage. Source: SOP 50 10 8.1, Sec. B, Ch. 1, Para. C.2.b; App. 15, Para. C.2.a. ### [How much equity does a start-up need for an SBA 7(a) loan?](https://www.sbaexpress.loans/answers/how-much-equity-does-a-start-up-need-for-an-sba-loan/) A start-up must inject at least 10% of total project costs. SBA treats a business as a start-up when it has been in operation for 1 year or less. Source: SOP 50 10 8.1, Sec. B, Ch. 1, Para. C.2.b; Ch. 2, Para. C.2.a. ### [Does an SBA Express loan require a down payment?](https://www.sbaexpress.loans/answers/does-an-sba-express-loan-require-a-down-payment/) SBA sets no fixed percentage. Whether to require equity is left to the lender's business judgment. A loan to buy a business is the exception, because Appendix 15's equity rules apply. Source: SOP 50 10 8.1, Sec. B, Ch. 2, Paras. A.2 and C.2.b. ### [How much equity do I need to buy a business with an SBA loan?](https://www.sbaexpress.loans/answers/how-much-equity-to-buy-a-business-with-an-sba-loan/) On an Initial Acquisition, the requirement is 10%, which cannot be reduced or eliminated, measured against total project cost. Source: SOP 50 10 8.1, App. 15, Para. C.2.a. ### [Can the lender waive the equity injection on a partner buyout?](https://www.sbaexpress.loans/answers/can-a-lender-waive-the-equity-injection-on-a-buyout/) Yes, on Business Expansions and Owner Buyouts. The lender may reduce or eliminate it if the borrower has sufficient liquidity and working capital and no negative net worth. Initial Acquisitions get no waiver. Source: SOP 50 10 8.1, App. 15, Para. C.2.a. ### [What counts as an equity injection on an SBA 7(a) loan?](https://www.sbaexpress.loans/answers/what-counts-as-an-sba-equity-injection/) Unborrowed cash, qualifying personal loans, grants without clawbacks, verified prepaid expenses, full standby debt and true equity investments. On a business purchase, some sources are limited to half of the required equity. Source: SOP 50 10 8.1, Sec. B, Ch. 1, Para. C.2.b; App. 15, Para. C.2.a. ### [Can gift money be used for the SBA equity injection?](https://www.sbaexpress.loans/answers/can-gift-money-be-used-for-an-sba-equity-injection/) Yes. Cash that is not borrowed counts, including a gift, and it is an unlimited source on a business purchase. A gift letter alone is not enough proof. Source: SOP 50 10 8.1, App. 15, Para. C.2.a; Sec. B, Ch. 6, Para. D.3.f. ### [Can I borrow the money for my SBA equity injection?](https://www.sbaexpress.loans/answers/can-i-borrow-the-money-for-an-sba-equity-injection/) Sometimes. A personal loan counts if repayment comes from a source other than the business's cash flow. Salary from the business does not qualify. Source: SOP 50 10 8.1, Sec. B, Ch. 1, Para. C.2.b; App. 15, Para. C.2.a. ### [Can a seller note count toward the SBA equity injection?](https://www.sbaexpress.loans/answers/can-a-seller-note-count-toward-the-sba-equity-injection/) Yes, if it is on full standby for the term of the 7(a) loan, with no payments of principal or interest. Seller debt and other limited sources can supply no more than half of the required equity injection. Source: SOP 50 10 8.1, App. 15, Para. C.2.a. ### [What does full standby mean on a seller note?](https://www.sbaexpress.loans/answers/what-does-full-standby-mean-on-a-seller-note/) No payments of principal or interest for the term of the 7(a) loan. Interest may accrue and be added to the standby debt, then paid after the 7(a) loan is paid in full. Source: SOP 50 10 8.1, App. 15, Para. C.2.a. ### [Can a seller note have monthly payments alongside an SBA loan?](https://www.sbaexpress.loans/answers/can-a-seller-note-have-payments-alongside-an-sba-loan/) Yes, but it then does not count as equity. Total debt for the purchase, including seller debt not on full standby, is limited to the business valuation and must fit debt service coverage. Source: SOP 50 10 8.1, App. 15, Para. A. ### [Can an outside investor's money count as SBA equity?](https://www.sbaexpress.loans/answers/can-an-outside-investor-count-toward-sba-equity/) Yes, if it is true equity with no agreement to repay or recover the investment before the SBA guaranty is released. On a business purchase, a non-controlling minority investment is a limited source. Source: SOP 50 10 8.1, App. 15, Para. C.2.a. ### [How does a lender verify my SBA equity injection?](https://www.sbaexpress.loans/answers/how-does-a-lender-verify-an-sba-equity-injection/) For cash, the lender needs a check or wire with proof it was processed. It also needs at least 30 days of statements showing the funds, plus proof of deposit or use. Source: SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.3.f. ### [How much is the down payment on an SBA 504 loan?](https://www.sbaexpress.loans/answers/how-much-is-the-down-payment-on-an-sba-504-loan/) The borrower contributes at least 10% of the financing, 15% for a new business or limited or special purpose property, and 20% for both. Source: 13 CFR ยง 120.910; SOP 50 10 8.1, Sec. C, Ch. 1, Para. B. ### [Can I use a 401(k) rollover (ROBS) for my SBA equity injection?](https://www.sbaexpress.loans/answers/can-a-401k-rollover-fund-an-sba-equity-injection/) Yes, if the plan complies with IRS, Treasury and Labor rules. The lender must flag the rollovers as business start-ups (ROBS) plan, and each plan sponsor gives a full unconditional guaranty regardless of ownership. Source: SOP 50 10 8.1, Sec. A, Ch. 2, Para. D.