The most common question when buying a business with an SBA loan is simple: how much do I need to put down? The current answer is a 10% equity injection — but what counts toward that 10% is where deals get made or broken, and the rules tightened in 2025. Here’s exactly how it works.
The 10% rule
Under the SBA’s current standard operating procedure (SOP 50 10 8, effective June 1, 2025), a change of business ownership requires a minimum 10% equity injection from the buyer. On a $1,000,000 purchase, that’s at least $100,000. This is the buyer’s “skin in the game,” and it’s non-negotiable for an SBA-backed acquisition.
What counts as your equity injection
The injection generally has to be cash or other acceptable equity the buyer contributes. The wrinkle — and the part that changed — is seller notes.
Seller notes count only under strict conditions
A seller note can count toward your 10% injection only if:
• it’s on full standby — no principal or interest payments — for the
entire term of the SBA loan (often 10 years), and
• it makes up at most half of the required injection.
So on a $100,000 required injection, no more than $50,000 can be a standby seller note; the rest must be the buyer’s cash or other acceptable equity.
This is a meaningful change. Previously, buyers leaned harder on seller financing to minimize cash out of pocket. The 2025 SOP closed much of that door, so plan on bringing real cash.
Why this matters for your deal
- Budget for cash, not just structure. If you were counting on a lightly-restricted seller note to cover your down payment, the standby and 50% limits will change your math.
- Seller financing still helps — just not as a way to avoid putting your own money in. See seller financing for buying a business.
- Confirm the current rules. SBA SOPs are revised periodically; your lender works from the version in effect when you apply.
How to plan your down payment
- Know the purchase price and multiply by 10% for your minimum injection.
- Identify your cash and other acceptable equity sources.
- Decide whether a standby seller note fills part of it (up to half).
- Confirm the structure with your SBA lender early — before you’re under contract.
The bottom line
To buy a business with an SBA loan, plan on a 10% minimum down payment, most of it your own cash. A seller note can cover up to half — but only on full standby for the whole loan term. The rules changed in 2025 and can change again, so confirm the current SBA requirements with your lender before you structure the deal. See business acquisition loans for the full picture.
Frequently asked questions
- How much down payment do you need for an SBA business acquisition?
- Under current SBA rules (SOP 50 10 8), a change of ownership requires a minimum 10% equity injection — so on a $1 million purchase, at least $100,000. Some of that can be a seller note, but only on full standby and only up to half the injection, so most of it must be cash or other acceptable equity.
- Can a seller note count as my down payment?
- Partially. A seller note can count toward the required 10% equity injection only if it is on full standby — no principal or interest payments — for the entire term of the SBA loan, and it can make up at most 50% of the required injection. The rest must be the buyer's cash or other acceptable equity.
- Why did the SBA tighten the equity rules?
- The SBA's SOP 50 10 8 (effective June 1, 2025) returned to stricter standards, limiting structures that let buyers put in very little of their own cash. The goal is to ensure buyers have real skin in the game. These rules change over time, so confirm the current version with your lender.
Sources
Loan programs, rates, and eligibility change. We re-check sources on the “updated” date, but always confirm current terms directly with a provider.