SBA Equity Requirement Calculator
On an SBA 504 project, 10% down is only the standard minimum: SOP 50 10 8.1 raises it to at least 15% or 20% on two facts. One is whether the business has been in operation for 2 years or less when the loan is approved. The other is whether the property is Limited or Special Purpose, which is a wider question than whether the SOP's list of 25 examples names it. The percentage is taken on "the Project cost, excluding administrative costs" (13 CFR 120.910(a)): on a $1.2 million Project cost that is the difference between a $120,000 and a $240,000 contribution. The calculator applies the percentage to the cost you enter.
What to enter: the 504 Project cost, excluding administrative costs. Appendix 3 of the SOP defines a Project as "The purchase or lease, and/or improvement or renovation of one or more long-term fixed assets by a small business, with 504 financing, for use in its business operations." The 7(a) start-up rule further down uses a different base, all costs required to become operational, so do not enter that figure for a 504 project. We are not a lender or a CDC: confirm what belongs in your Project cost with your CDC.
Where these numbers come from
Every percentage is from SBA SOP 50 10 8.1, effective 1 October 2026, which is the version currently in force. SBA's notice issuing it says it applies to applications that "are issued an SBA loan number on or after that date" (Information Notice 5000-880695); if your application was submitted before then, ask your CDC which edition governs it. Nothing here is our estimate.
The SOP's table of Typical 504 Structures (Section C, Chapter 1, Paragraph B), with our shorter labels and percent signs added:
| Party | Standard | New Business or Limited/Special Purpose | Both |
|---|---|---|---|
| Third Party Lender | 50% | 50% | 50% |
| CDC / SBA debenture | 40% | 35% | 30% |
| Borrower | 10% | 15% | 20% |
The SOP calls these typical structures: generally a Third Party Lender provides "50% or more of the financing" and a CDC "up to 40% of the financing". In the two higher columns the lender's 50% is a floor: "the Third Party Loan must total at least 50% of the Project costs if the Borrower (or Operating Company if the Borrower is an Eligible Passive Company) has operated for 2 years or less or the Project is for the acquisition, construction, conversion or expansion of a limited or single purpose asset".
Under Borrower's Contribution in Paragraph E of that chapter, "New businesses must contribute at least 15%." A business with a Limited or Special Purpose Property "Must contribute at least 15%, in which case the Debenture will finance no more than 35% of the Project", and "Must contribute at least 20%, if the Project involves a new business". The SOP adds: "If a Project will finance both a New Business and a Limited or Special Purpose Property, the Applicant must contribute at least 20% of the Project cost." It calls these figures "the minimums required by policy" and adds that "in some cases it may be appropriate to consider additional Borrower contribution and/or collateral to mitigate the credit weaknesses of a proposed project". The other 504 rules are on our SBA 504 loan requirements page.
The percentages are taken on the Project cost. The regulation sets the contribution "in an amount equal to the following percentage of the Project cost, excluding administrative costs" (13 CFR 120.910(a)). In the SOP's debenture pricing example (Section C, Chapter 3, Paragraph A) total project costs are "land, building and machinery and equipment and eligible soft costs", and the administrative costs "are not part of the Project costs" (Chapter 1, Paragraph C).
The contribution can be borrowed, and equity you already hold in the Project's land or buildings can count. Under Borrower's Contribution the SOP says "All Borrowers must contribute at least 10%, which may be borrowed as long as it is subordinate to the Third Party Loan and the 504 debenture", and "The Borrower’s equity in land and/or buildings previously acquired may be counted toward the Borrower’s contribution if the land and/or buildings are part of the Project."
What counts as a new business
The first test is the age of the business, not the years its owner has spent in the industry. Appendix 3 of the SOP defines a New Business, for 7(a) and 504 alike, as:
A business that has been in operation for 2 years or less at the time the loan is approved.
Four details in the same entry matter. The clock starts with revenue: "Operations are deemed to begin when the business begins generating revenue from its intended operations". An older business "may be considered a New Business if it is a change of ownership that will result in new, unproven ownership/management and increased debt unrelated to business operations", so buying an established operation does not automatically keep you out of the higher column. The entry puts that review on the CDC: "If there is a change of ownership, the CDC must review the management and level of debt in order to decide whether an additional Borrower’s contribution of 5% is necessary." And the entry has a carve-out: "When an existing business starts a business that is in the same 3-digit NAICS code with identical ownership, and they are Co-Borrowers, SBA considers this to be a business expansion and not a new business."
The regulation draws the same two-year line: the contribution is at least 15 percent "if the Borrower (or Operating Company if the Borrower is an Eligible Passive Company) has operated for two years or less" (13 CFR 120.910(a)(1)). This is not the 7(a) start-up test, which is shorter: a business is a start-up for the 10% equity injection "if it has been in operation (i.e., generating revenue from intended operations) for 1 year or less".
Thirty years in the industry does not by itself exempt a business whose first revenue came last month.
The property list, and the trap in it
These are the 25 examples of Limited or Special Purpose Property that SOP 50 10 8.1 lists in Section C, Chapter 1, Paragraph E, under Borrower's Contribution, verbatim:
Amusement parks; Bowling alleys; Car wash businesses; Cemeteries; Cold storage facilities where more than 50% of total square footage is equipped for refrigeration; Dormitories; Farms, including livestock and dairy facilities; Funeral homes with crematoriums; Gas stations; Golf courses; Hospitals, surgery centers, urgent care centers, and other health or medical facilities; Hotels, motels, and other lodging facilities; Marinas; Mines; Nursing homes, including assisted living facilities; Oil wells; Quarries, including gravel pits; Railroads; Sanitary landfills; Service centers (e.g., oil and lube, brake, or transmission centers) with pits and in-ground lifts; Sports arenas; Swimming pools; Tennis clubs; Theaters and auditoriums; and Wineries.
Not being on that list is not a safe harbor. The SOP says the list "is not intended to be all-inclusive" and that SBA "may determine that other properties meet the Limited or Special Purpose Property definition". That definition, in Appendix 3, is "A limited-market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built." The SOP also puts the question to your CDC:
CDCs must address whether the Project Property is Limited or Special Purpose in their credit memorandum and include an explanation of their conclusion.
So the CDC has to write down a conclusion either way. If your property type is not named, ask which way it will call it before you budget the 10%. A veterinary hospital is one example: the word veterinary appears nowhere in SOP 50 10 8.1, and we found nothing in it that says how far "other health or medical facilities" reaches.
Section C, Chapter 1, Paragraph F adds that when a CDC submits a 504 application under the non-delegated processing method, "SBA will make the final determination as to the eligibility of the Applicant, use of proceeds, the credit decision, including adequacy of collateral pledged, structure of the loan, and the Borrower’s contribution of the Applicant."
If you are using 7(a) rather than 504
For a Start-Up Business on a Standard 7(a) or 7(a) Small loan, Section B of the SOP says:
SBA considers an equity injection (Applicant contribution) of at least 10 percent of the total project costs (all costs required to become operational, regardless of the source of funds, except for lines of credit and 504 loans) to be necessary for a Start-Up Business to operate on a sound financial basis.
Read the parenthesis closely. The 7(a) start-up base is all costs required to become operational, not the loan amount, "regardless of the source of funds". On our reading that takes in costs paid from your own savings, a friend's money or an equipment vendor's term loan; the SOP's two exceptions are lines of credit and 504 loans. It is a different base from the 504 Project cost, so do not carry the calculator's 504 figure across to a 7(a) loan. For SBA Express, whether to require an equity injection "is left to the business judgment of the Lender", and a business purchase follows Appendix 15 instead.
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Frequently asked questions
Is the SBA 504 down payment always 10%?
No. Under SOP 50 10 8.1, 10% is the standard 504 minimum. It rises to at least 15% if the business is a New Business or the property is Limited or Special Purpose, and to at least 20% if both apply.
Is the SBA 504 percentage taken on the loan or on the project cost?
On the Project cost. 13 CFR 120.910(a) sets the 504 borrower contribution as a percentage of the Project cost, excluding administrative costs, and SOP 50 10 8.1 defines a Project as the purchase or lease, improvement or renovation of long-term fixed assets with 504 financing. The 7(a) start-up rule uses a different base: all costs required to become operational.
What makes a property "special purpose" for SBA?
Appendix 3 of SOP 50 10 8.1 defines a Limited or Special Purpose Property as a "limited-market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built", and Section C, Chapter 1, Paragraph E lists 25 examples. The list is not all-inclusive, and your CDC must explain its conclusion in its credit memorandum.
I have run businesses for years. Am I still a new business?
For the 504 contribution, yes if the business has been in operation for 2 years or less when the loan is approved, counted from when it began generating revenue from its intended operations. The SOP's carve-out is an existing business starting a business in the same 3-digit NAICS code with identical ownership, as Co-Borrowers. The 7(a) start-up test is shorter: 1 year or less.
Is the 10% on a 7(a) start-up loan measured against the loan?
No. Under SOP 50 10 8.1 the 10% for a Start-Up Business on a Standard 7(a) or 7(a) Small loan is measured against total project costs: all costs required to become operational, regardless of the source of funds, except for lines of credit and 504 loans. For SBA Express the decision is left to the lender. See our SBA equity injection requirements page.
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The contribution percentages in this calculator are the 504 minimums in SBA SOP 50 10 8.1 and 13 CFR 120.910 as retrieved on 10 October 2026, and they apply to the Project cost, excluding administrative costs. This page is general information, not lending, legal or tax advice, and it is not a commitment to lend. SBA reissues policy regularly. Your CDC and SBA make the determination. Confirm every figure with your CDC and lender before you commit capital.