I'm trying to understand how the SBA calculates the total project cost and therefore the minimum 10-20% equity check.

Key question is if I'm buying a business cash-free/debt-free, presumably I would want to fund the balance sheet with some cash at closing. Would that "extra" cash be considered part of the project cost? Would it count as equity for the SBA?

Example: Buying a business for \$90 to seller + \$10 of working capital & closing costs = \$100 project cost. Normally, that would require \$10 of equity and \$90 of SBA debt. However, let's say I want to fund \$10 of cash also onto the balance sheet. Option 1 is that the project cost is now \$110, and I need \$11 of equity and \$99 of SBA debt. Option 2 is that the SBA requires the \$10/\$90 split for the original project cost, and then \$10 of extra cash is just separate (i.e. all equity). The difference between the two options is funding either \$11 of equity or \$20 of equity, so pretty material.

Anyone know how the SBA would look at either of these two options?