SBA Equity Injection: Does 5% Cash + 5% Seller Standby Actually Close?

August 28, 2025

by an member from Pennsylvania State University in West Chester, PA, USA

I’m trying to get a clear sense of what’s realistic with SBA leverage in today’s environment. Obviously every deal is different, but assuming a well-qualified buyer and a solid business, is a 10% down structure still common? More specifically, how often do lenders actually close on deals structured as 5% personal cash + 5% seller note on full standby to satisfy the equity injection requirement? I’d love to hear from anyone who has executed this structure. What worked, what pushback you received from lenders, and whether it’s truly bankable in practice. And if you have bank recommendations that are flexible and friendly toward this approach, that would be incredibly helpful.

Reply by a lender
from University of Southern California in Los Angeles, CA, USA

^redacted‌ This is one of our main structures. We have multiple lenders that are happy closing deals with 5% down and 5% seller note on full standby. We can introduce you to multiple SBA lenders that can fund deals with this structure. The bank pay us after your loan closes, so this is a 100% free service for you. I actually just helped a Searchfunder member close on a 5% down and 5% seller note on full standby and a 7.99% fixed rate. You can click here to schedule a meeting with me: https://calendly.com/tom-gosbaloans/30min. Look forward to chatting!

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We do a lot of loans on the 5% / 5% structure. They do close. However, the cash flow has to work with the lower equity down and you are unlikely to see as aggressive of pricing as many of the lenders offering the most aggressive pricing either don't do the 5% / 5% structure or price loans structured that way higher. You can reach me here or directly at redacted if you would like to discuss further.

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