SBA 7(a) Veteran Equity Change

Veterans buying a business with an SBA 7(a) loan can now fund the entire 10% equity injection with other people’s money. The change starts Wednesday (Veterans Day) and the SBA says it runs through fiscal year 2027.

Under the old rule, outside sources like seller standby notes and investor capital could cover half of the required injection at most. The buyer had to bring the rest in cash. On a $1.5M project, that meant $75K out of the veteran’s own pocket. Now the full $150K can come from the seller, an investor or some mix of the two.

That matters because operating skill and a fat savings account don’t always show up in the same person (I can personally confirm this). A veteran with ten years running crews or logistics can now be a serious buyer without first spending years saving up a down payment.

Allowed by the SBA and approved by a lender are two different things. Lenders can be stricter than SBA, and a credit committee looking at a buyer with no personal cash in the deal will ask harder questions about experience, cash flow and the standby note terms. Sellers get a vote too. Agreeing to a standby note means waiting on that money, and some sellers will say no.

If you own a business, this widens your pool of qualified buyers. If you’re a veteran thinking about buying one, I’m a Marine and I’d be glad to talk through what a lender will and won’t go for. The rule is in place through FY27, which is plenty of time to do a good deal and not much time to dither.

Source: SBA news release 26-117, https://www.sba.gov/article/2026/11/09/sba-establishes-new-7a-equity-flexibility-veterans-small-business-acquisitions