Quick answer: Yes – SBA 7(a) loans are the standard way to finance buying a business, typically with at least 10% down, terms up to 10 years, and a lender review of both you and the business you are buying.
Written by James, Small Business Lending Specialist at Fast SBA
Yes, you can buy a business with an SBA loan. The SBA 7(a) program is the standard way small business acquisitions get financed in the US, and “changes of ownership” is an approved use right on the SBA’s own list. In plain terms: you put down about 10%, you can borrow up to $5 million, you repay over 10 years, and the process usually runs 60 to 90 days from application to funding.
In this guide:
- The down payment: 10%, and sometimes less
- What the loan looks like
- How long it takes
- What lenders look at before they say yes
- Already own a business? Read this
- Where to start
- Frequently asked questions
The down payment: 10%, and sometimes less
For a complete change of ownership, the SBA requires a minimum equity injection of 10% of total project costs. That base includes the purchase price plus working capital and transaction costs, not just the sticker price. On a $650,000 deal, plan on at least $65,000 of equity.
Lenders accept personal savings, family gifts with a gift letter, retirement funds rolled over through a ROBS structure, and home equity, as long as you can carry those payments from income outside the acquired business.
One lever matters. Up to half of the required equity can come from a seller note, but only if the seller accepts full standby for the entire life of the SBA loan: no principal or interest payments to the seller until the SBA loan is paid off. On that $650,000 deal, a cooperative seller can bring your real cash need down to about $32,500.
Two exceptions: special-use properties like hotels and car washes can require 15%, and existing owners buying in their own industry may need no equity injection at all (more below).
Already looking at a deal? See what you could qualify for – it takes under 2 minutes.
What the loan looks like
- Amount: up to $5 million, which covers most Main Street acquisitions. Larger deals can pair a 7(a) loan with a conventional loan in a pari passu structure. Our SBA 7(a) guide has the full program details.
- Term: up to 10 years for a business acquisition, or up to 25 years when real estate makes up more than half of what the loan pays for. The loan fully amortizes, so there is no balloon payment.
- Rate: variable, tied to the prime rate, which sits at 6.75% as of September 2026. By rule, loans over $350,000 cap at prime plus 3%, so 9.75% is the ceiling today. Well-qualified buyers of solid businesses tend to land between 9% and 9.75%.
- Fees: the SBA charges a one-time guarantee fee of 2% to 3.75% of the guaranteed portion, depending on loan size. On a $1 million loan that works out to about $26,250, and most borrowers finance it into the loan rather than paying cash at closing.
How long it takes
Plan for 60 to 90 days from a complete application to money in the bank, and 90 to 120 days from your first conversation with a lender. Acquisitions sit at the longer end because of the valuation and seller paperwork.
The part you control is who you borrow from. An analysis of 119,555 funded 7(a) loans in SBA data shows the median borrower had money 20 days after approval in fiscal years 2024 and 2025. But that median hides a wide spread: the fastest high-volume lenders disburse in a median of 3 days after approval, the slowest take 43. Lenders in the SBA’s Preferred Lenders Program also decide faster, roughly 18 business days in underwriting versus 31 for everyone else, because they approve the guarantee in-house instead of sending the file to the SBA.
Ask every lender two questions up front: are you a Preferred Lender, and how fast do you typically fund after approval?
What lenders look at before they say yes
Three things decide most acquisition deals:
- Cash flow. Lenders want the business’s historical cash flow to cover the new loan payment with room to spare, usually a debt service coverage ratio of 1.25x or better. Run this math on the seller’s numbers before you fall in love with a deal. Below 1.15x, renegotiate the price before you apply.
- An independent valuation. The lender orders a third-party appraisal of the business. If it comes in below the agreed price, the loan gets capped at the appraised value, so you either bring more cash or renegotiate.
- Your experience. A buyer with years in the same industry is a fundamentally better risk than an outsider with identical financials. If you are switching industries, expect more questions and a bigger role for seller transition support.
Our SBA loan requirements page has the full document checklist lenders ask for.
Already own a business? Read this
A rule change effective September 30, 2025 quietly made acquisitions easier for existing owners. If your company buys or starts a business in the same six-digit industry code, with identical ownership and both companies as co-borrowers, the SBA treats the deal as a business expansion rather than a new business. Expansions require no equity injection, and the old condition that the target had to sit in the same geographic area is gone. An HVAC company in one state can now buy one across the country with up to 100% financing, as long as management control holds up. Lenders read this rule differently in practice, so raise it early.
Where to start
Buying a business is one of the strongest uses of an SBA loan, and one of the easiest to get wrong when the deal is structured poorly before a lender ever sees it.
Fast SBA is not a lender. We match business buyers and owners with independent SBA advisors who structure acquisition loans every day, and we only earn a fee if your deal closes. Tell us about the business you want to buy and we will connect you with the right advisor, usually within a few days.
Get matched with an SBA acquisition advisor
Frequently asked questions
Can I buy a business with no money down using an SBA loan?
Almost never as a first-time buyer. The floor is 10% equity, and a full-standby seller note can cover half of that, bringing real cash down to about 5%. The true zero-down path is the expansion rule for buyers who already own a same-industry business.
How long does it take to buy a business with an SBA loan?
Sixty to ninety days from complete application to funding for a typical 7(a) acquisition. The median time from approval to first disbursement is about 20 days, and the biggest variable is your lender, not the SBA.
Can I use an SBA loan to buy out my business partner?
Yes. Partner buyouts are an approved use. If the loan finances more than 90% of the buyout price, the remaining owners must certify they stay active in management, and the business needs at least 10% equity on its pro-forma balance sheet after the buyout.
Does the loan cover anything besides the purchase price?
Yes. One 7(a) acquisition loan can cover the purchase price, working capital, and transaction costs. All of it counts toward the base for the 10% equity injection, so size your down payment accordingly.
Is the down payment always 10%?
No. Ten percent is the floor for a standard change of ownership. Special-use properties can require 15%, and expansion acquisitions by existing owners can require nothing.
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