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FundingForBusinesses

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SBA acquisition equity injection calculator

SBA rules require an equity injection of at least 10% of total project cost on a change of ownership, and a seller note only helps if it is on full standby. This works out the cash you actually need at the closing table.

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Your numbers

SBA guarantee fee, legal, valuation, environmental.

SBA rules require at least 10% of total project cost on a change of ownership.

Counts toward the injection only if the seller takes no payments at all while the SBA loan is outstanding.

Cash you need at closing

$66,000

Your own money, after any standby seller note credit.

Total project cost

$1,320,000

Equity injection required

$132,000

10% of project

Seller note credit applied

$66,000

On full standby

Loan amount

$1,188,000

Monthly payment

$16,364.70

Annual debt service

$196,376

Feed this into the DSCR calculator

Lenders also want to see reserves after closing. A buyer who puts in their last dollar is a weaker credit than one who keeps six months of personal living expenses in the bank, even at an identical injection percentage.

This calculator runs entirely in your browser. Nothing you type is sent to us, stored, or shared. Equity injection rules and the treatment of seller notes are set by SBA SOP and change periodically. Confirm the current requirements with your lender. Results are estimates for comparison only - they are not an offer, a quote, or advice, and your actual terms will be set by a lender.

Total project cost, not purchase price

The injection is calculated against everything the loan funds: the purchase price, post-close working capital, closing costs, and the guarantee fee. Buyers routinely budget 10% of the purchase price and arrive short.

The standby seller note trap

A seller note can count toward the equity injection only if it is on full standby for the entire life of the SBA loan - the seller receives nothing, not even interest, for up to ten years. It is also capped at half the required injection. Many sellers agree to 'hold paper' and then withdraw once they understand what standby means, which is one of the most common reasons an acquisition falls apart at underwriting.

Questions

Can I borrow my down payment?
Generally not from a source that requires repayment during the SBA loan's life. Personal funds, a home equity line the SBA permits, or a fully standby seller note are the usual routes. Borrowing the injection from another business lender defeats the purpose and lenders check.
Do I need reserves on top of the injection?
Lenders will look for them even when no rule requires it. A buyer with post-closing liquidity is a materially stronger credit than one without.

We are a publisher, not a lender or broker. We never take applications and are never paid by borrowers. Read the full disclosures.