SBA Loans with personal money in

March 30, 2023

by a searcher from Harvard University - Harvard Business School in Austin, TX, USA

I spoke with couple of banks for SBA 7a loans, they mentioned a minimum of 15% of personal money to be put in the deal by the searcher. Is this a common practice across all banks? Are there banks that do not require this personal money?

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

I would agree with most of what has been posted here. Typically Banks are looking for 10% in total equity in an SBA transaction, although there are some circumstances where you can get away with as little as 5% equity so long as the seller carries back a note for 5 or more on fully standby for the life of the SBA loan. The equity portion can come from the searcher, the investors, or a combination of both. Some lenders do wish to see some of the equity come directly from the searcher, but we have plenty of lenders that do not require that. I would be more than happy to jump on a call at any time to discuss all of the rules and guidelines around equity contributions. You can reach me here or directly at redacted Good luck.

Reply by a searcher
in Boston, MA, USA

Bank to bank policy, not SBA-driven. They may frame it as having "personal skin in the game," which seems redundant to me when you're signing a personal guarantee! In speaking with roughly a dozen banks while under LOI, I only saw three that had this policy or some version of it.

Is it possible you misunderstood and the 15% was their (bank, not SBA) policy for required minimum equity injection? Or maybe they wanted you personally to cover 15% of the equity injection, or roughly 2-3% of the overall deal in an average structure?

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