Do SBA 7(a) Loans Require a Down Payment?

Small Business Administration (SBA) loans are a reliable funding source for business owners who may be unable to secure traditional loans.

If you are a business owner considering an SBA 7(a) loan, you may wonder if a down payment is required. The answer is almost always no!

Zero Down Payment for Most SBA 7(a) Loans

Generally, 7(a) loans require zero down payment. These loans have favorable terms and make borrowing accessible for small businesses. No down payment is required if you seek a loan to finance working capital or real estate.

If your business has cash flow, our team of experts at Business Funding Group (BFG) could help you secure additional working capital on top of the purchase price—a benefit unheard of in the industry!

Down Payments for Business Acquisitions

Acquiring another company could be a smart move for your business and is financially possible with our help.

When you pursue an SBA loan for a business acquisition, a 10% down payment is required for the total project cost, not just the purchase price. The total cost could factor in the required working capital beyond the purchase price for costs such as fees or operational expenses that come with taking over another company.

The good news is that as of January 2025, the SBA’s rules changed to benefit small businesses even more. The new rules allow the required 10% down payment to be financed by a seller’s note if it is on standby for two years with no balloon payment.

So, a business owner could now acquire another business with zero money down!

What Down Payments Are Used For

SBA loans help small business owners who are unable to secure loans from traditional lenders. However, there is still a risk when one party loans money to another. Requiring a down payment allows the borrower to share that risk.

Demonstrating good credit and sufficient cash flow could help us get you an SBA loan with no money down.

Down payment requirements for traditional bank loans could be up to 50%, which is one of many reasons small businesses find SBA loans attractive and attainable. Growing your business could begin with little to no upfront cost.

Get Expert Guidance on SBA 7(a) Loans

The prospect of a down payment should not stop you from pursuing a loan for your small business. At BFG, our experts leverage our lender relationships to get you the best loan and terms possible. Most SBA 7(a) loans could be secured with zero down payment.

When you work with us, we help make the process less complicated. Call us today to discuss your business goals and get started!