You’ve probably heard it a thousand times: “You need 10% down to buy a business with an SBA loan.” Brokers say it. Banks say it. The internet says it.
They’re not entirely wrong — but they’re not telling you the whole story either.
Here’s the truth: you can buy a business with zero dollars out of your own pocket using an SBA loan. Not by bending the rules. Not by committing fraud. By understanding exactly how the equity injection requirement actually works — and using three legitimate strategies that most people never hear about.
If you’ve been searching for how to buy a business with no money down, this is the most honest breakdown you’ll find. No fluff. Just the playbook.
The SBA Equity Injection Rule — What It Actually Says
Let’s get the facts straight before we talk strategy.
The SBA requires a minimum 5% equity injection from the new ownership group on a business acquisition. On a change-of-ownership deal, this is non-negotiable. You cannot finance 100% of the purchase price with debt alone.
So if you’re buying a business for $1,000,000, the SBA says at least $50,000 in equity needs to come from the buyer’s side.
Here’s where most people stop reading. They see “$50,000” and think, “Well, I don’t have that sitting in my savings account, so I guess I can’t buy a business.”
Wrong.
The SBA requires equity injection from the ownership group. It does NOT require that every dollar comes from your personal bank account. That distinction is everything.
The 5% equity can come from:
- Your personal savings (the obvious route)
- Outside investors who join your ownership group
- Gift funds from family, friends, or mentors
Methods 2 and 3 are how smart acquisition entrepreneurs buy businesses with no money of their own. Let’s break down exactly how each one works.
Method 1: Raise the Down Payment From Investors
This is the most powerful strategy for buying a business with zero personal cash — and it’s the one that separates serious acquisition entrepreneurs from everyone else.
How It Works
You bring in one or more outside investors to fund 100% of your equity injection. In exchange, they receive a minority equity stake in the business. You operate the business. They get a return on their investment. Everybody wins.
The structure is simple:
- The SBA requires 5-10% equity injection (depending on the deal)
- Your investor(s) put up 100% of that equity
- They receive a minority ownership stake — typically 5-10%
- You own the remaining 90-95% of the business
- You put in $0 of your own money
Real Math: $1M Deal
Let’s say you’re acquiring a business for $1,000,000.
- SBA loan: $900,000-$950,000 (90-95% of the deal)
- Equity injection required: $50,000-$100,000
- Investor contribution: $50,000
- Investor equity stake: 5-10%
- Your equity stake: 90-95%
- Your cash out of pocket: $0
Read that last line again. You own 90-95% of a million-dollar business and you didn’t write a single check.
Real Math: $2M Deal
Now scale it up. You’re buying a business for $2,000,000.
- SBA loan: $1,800,000-$1,900,000
- Equity injection required: $100,000-$200,000
- Investor contribution: $100,000
- Investor equity stake: 5-10%
- Your equity stake: 90-95%
- Your cash out of pocket: $0
A $2M business throwing off $400K-$600K in annual cash flow, and you acquired it without touching your savings. That’s the power of structuring deals correctly.
The Catch Most People Don’t Know About
Here’s the part that trips people up: not every bank allows 100% of the equity injection to come from investors.
Some lenders have internal policies requiring the primary operator to contribute a portion of the down payment personally. They’ll tell you, “The borrower needs skin in the game.” And if you’re only talking to one or two banks, you might think that’s the universal rule.
It’s not.
There are lenders in the SBA ecosystem that explicitly allow 100% of the equity injection to come from outside investors. You just need to know which ones — and that’s where having the right broker makes or breaks your deal.
Method 2: Gift Funds
The second strategy for buying a business with no money down is even simpler: someone gives you the money as a gift.
How It Works
A family member, friend, mentor, or anyone in your life can gift you the funds needed for your equity injection. This is 100% legitimate and fully SBA-compliant.
The requirements are straightforward:
- Gift letter: The donor must sign a letter confirming the funds are a gift with no expectation of repayment
- Proof of funds: The bank will want to see that the donor actually has the money (bank statements)
- Paper trail: The transfer needs to be documented and traceable
That’s it. No complex legal structures. No equity stake given away. Just a gift, properly documented.
Real Math: $1M Deal With Gift Funds
- Purchase price: $1,000,000
- Equity injection required: $50,000
- Gift from family member: $50,000
- Your ownership: 100%
- Your cash out of pocket: $0
With gift funds, you don’t even give up an equity stake. You own the entire business, and your personal investment was zero.
Who Uses This Strategy?
More people than you’d think. Parents helping adult children acquire their first business. Spouses or partners contributing funds. Mentors who believe in the buyer’s ability to operate. Wealthy family members who’d rather gift money toward a productive asset than watch it sit in a savings account.
If you have someone in your life willing to support your entrepreneurial goals, gift funds are the cleanest path to a zero-down acquisition.
Method 3: SBA Expansion Loan (0% Equity Injection)
This is the holy grail of zero-down business acquisitions — and almost nobody talks about it.
If you already own a business and you’re looking to acquire a competitor or a company in the same industry, you may qualify for a true 0% equity injection through an SBA expansion loan. No investors needed. No gift funds required. Just your existing business serving as the equity.
How It Works
The SBA allows 0% equity injection on expansion acquisitions when the buyer’s existing business is in the same industry as the business being acquired. Specifically, the NAICS codes need to match — or at minimum, the first three digits of the NAICS code must be the same (meaning you’re in the same business activity category).
Your existing business essentially serves as the equity and collateral for the deal. The SBA views this as a lower-risk transaction because you already have operational experience and an established business in the same space.
Requirements
- Existing business ownership: You must have owned and operated your current business for at least 2 years
- Same industry: The target acquisition must share the same NAICS code (or at least the first 3 digits must match)
- Operational experience: You need to demonstrate relevant industry experience through your current business
Real Math: $1M Expansion Deal
- Purchase price: $1,000,000
- Equity injection required: $0
- Investor contribution: $0
- Gift funds needed: $0
- Your ownership: 100%
- Your cash out of pocket: $0
That’s not a typo. With an expansion loan, you can acquire a million-dollar business with literally zero dollars down — no investors to bring in, no gifts to arrange, no equity to give away.
Who Is This Perfect For?
This strategy is ideal for business owners looking to grow by acquiring competitors. If you own a plumbing company and want to buy another plumbing company, a landscaping business acquiring another landscaper, or a dental practice buying a nearby practice — this is your path.
It’s the most powerful acquisition strategy available for existing business owners, and it’s drastically underutilized because most brokers and banks don’t even mention it.
👉 Learn more about SBA Expansion Loans here
What Does NOT Work (Don’t Even Try These)
Let’s kill some myths before they cost you time and money.
Borrowing Your Down Payment From Another Loan
This is not allowed. Full stop.
The SBA requires equity, not more debt. If you take out a personal loan, HELOC, or any other form of borrowing to cover your equity injection, it doesn’t count. The whole point of the equity injection is to ensure the buyer has real skin in the game — not just more leverage.
Banks will trace the source of your funds. If they see a recent loan deposit, your deal is dead.
Having the Seller Cover the Full Down Payment
Seller notes are a common part of SBA deal structures. A seller might carry 5-10% of the deal as a note on standby. But here’s what you need to understand: the 5% equity injection must come from the buyer’s side.
A seller note is debt, not equity. It can be part of your overall deal structure, but it cannot replace the equity injection requirement. The equity must come from the ownership group — either your cash, investor cash, or gift funds.
“Creative Financing” Schemes
Every few months, someone on Twitter or a podcast talks about some creative hack to buy a business with literally zero equity. If it sounds too good to be true, it probably violates SBA guidelines and will blow up your deal at the underwriting stage.
Stick with what works: investor equity, gift funds, or an expansion loan if you already own a business in the same industry. These are proven, compliant, and bankable.
Why Most Buyers Get Stuck — And How to Avoid It
Here’s the reality of the SBA lending market: most banks and brokers default to the most conservative interpretation of every rule.
They’ll tell you that you need 10% down, all from personal savings, with six months of liquidity on top of that. And for the lenders they work with, that might be true.
But the SBA lending ecosystem has thousands of participating lenders, and they don’t all have the same policies. Some are aggressive on equity injection requirements. Some allow 100% investor-funded down payments. Some are comfortable with gift funds. Some aren’t.
The difference between a deal that closes and a deal that dies is matching your specific situation with the right lender.
This is exactly why working with a broker who has deep lender relationships matters more than anything else in the process.
How GoSBA Structures Zero-Down Acquisitions
At GoSBA, we’ve helped hundreds of acquisition entrepreneurs buy businesses — and a significant number of them put zero personal cash into the deal.
Here’s what makes us different:
50+ Lender Network
We don’t work with one bank. We work with over 50 SBA lenders across the country. That means when one bank says no to investor equity, we already know three others that will say yes. When one lender won’t accept gift funds, we move to one that will.
This isn’t about finding a lender. It’s about finding the right lender for your deal structure.
$320M+ Funded in 2025
We’ve facilitated over $320 million in SBA loan funding in 2025 alone. That volume gives us leverage, relationships, and insight that a typical broker or bank simply doesn’t have. We know what’s getting approved because we’re closing deals every single week.
100% Free Service
GoSBA is completely free for borrowers. We’re compensated by the lender when your deal closes. You pay nothing — not for the consultation, not for the application, not for the structuring advice. Zero.
Free Business Plans & Financial Projections
Most SBA acquisition loans require a business plan and financial projections. Getting these done professionally typically costs $2,500 to $5,000. We provide them for free as part of our service.
That’s not a typo. You’re getting institutional-quality business plans and projections at no cost — the same documents that other firms charge thousands for.
Step-by-Step: How to Buy a Business With No Money Down
Here’s your exact playbook:
Step 1: Find the business. Identify an acquisition target. Know the asking price, cash flow, and basic financials.
Step 2: Determine your equity injection. Calculate 5-10% of the purchase price. This is the amount you need to bring to the table from the ownership group.
Step 3: Choose your strategy.
- Investor route: Identify one or more investors willing to contribute the equity injection in exchange for a minority stake. Formalize the arrangement.
- Gift funds route: Secure a commitment from a gift donor. Prepare for the gift letter and documentation requirements.
- Expansion loan route: If you already own a business in the same industry (matching NAICS code) for 2+ years, you may qualify for 0% equity injection — no investors or gifts needed.
Step 4: Work with a broker who knows the game. Not every lender will approve your structure. You need a broker with a wide lender network who can match your deal to a lender that accepts your equity source.
Step 5: Submit and close. With the right lender, the right structure, and the right documentation, your deal moves through underwriting and closes.
The entire process from LOI to close typically takes 45-90 days with an experienced broker managing the process.
The Bottom Line
Can you buy a business with an SBA loan and put $0 of your own money into the deal? Yes.
Is it technically “0% down”? No — the SBA still requires equity injection. But that equity does not have to come from your personal savings. Investors can fund it. Family can gift it. And if you already own a business in the same industry, an SBA expansion loan can eliminate the equity injection entirely. You can walk away owning 90-100% of a cash-flowing business without writing a personal check.
The key is working with someone who actually knows how to structure these deals and has the lender relationships to get them approved.
Most brokers can’t do this for you. Most banks won’t tell you it’s possible. That’s why GoSBA exists.
Ready to Buy a Business With Zero Out of Pocket?
Talk to GoSBA today. We’ll evaluate your deal, tell you exactly what’s possible, and match you with the right lender — for free.
No fees. No obligations. Just straight answers from a team that’s closed $320M+ in SBA deals and knows exactly which lenders will work with your structure.
