Has anyone worked with SBA 7(a) lenders who were comfortable using retained working capital at close to reduce the buyer cash equity requirement?

searcher profile

January 23, 2026

by a searcher from Columbia University - Columbia Business School in New York, NY, USA

Has anyone worked with SBA 7(a) lenders who were comfortable using retained working capital at close to reduce the buyer cash equity requirement? Would love to hear any examples or lender names. Looking to do this for a landscaping company
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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Hannah, I would be happy to have a discussion about what is required from the SBA. However, the updated rules are fairly clear on the minimum required equity. The standard is a 10% equity contribution on a business acquisition. However, if you get a seller to carry a note back for 5% or more of the purchase price that is on a full standby for the life of the SBA 7A loan, then you can get that required equity down to 5% of the loan amount. Now I am not sure what you mean by "retained working capital". If the seller is making a working capital adjustment at closing and leaving some of that cash in the business, that is great from a working capital perspective. However, the lender cannot use that as part of the SBA required down payment. The rules are quite clear that the SBA requires fresh equity in the transactions. Again, I would be happy to connect and discuss strategies for financing an acquisition. You can reach me here or directly at redacted
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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
All great comments regarding the requirement for actual cash contribution. Except for a partial buyin with a seller 2 year PG, the balance sheet can can count for down payment by the SBA….but I don’t know of any lenders doing that and haven’t heard of many sellers agreeing to the 2 year PG. so you’ll just need to assume actual cash will need to be brought to the table.
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