Answer
Can I get a business loan with no money down?
For working capital, often yes. For buying a business or property, effectively never. Here is where the line sits.
For working capital, equipment, and most online lending, yes — no down payment is normal. For buying a business or commercial property with SBA financing, no: a 10% equity injection is a program requirement, and startups are usually asked for 20% to 30%.
Where the line actually falls
| What you are financing | Down payment | Why |
|---|---|---|
| Working capital | Usually none | There is no asset to put equity into |
| Equipment | 0% to 20% | 100% financing is common for standard, resaleable equipment |
| Line of credit | None | Revolving credit has no purchase to fund |
| Invoice factoring | None | You are selling an asset, not buying one |
| Buying a business | 10% minimum (SBA) | Program requirement; skin in the game |
| Commercial property | 10% SBA, 20-30% conventional | Loan-to-value limits |
| Startup | 20% to 30% | No history to underwrite against |
The SBA injection requirement, precisely
For a business acquisition or a change of ownership, SBA rules require an equity injection of at least 10% of the total project cost — and total project cost includes the purchase price plus closing costs plus any working capital built into the loan. On a $1 million purchase, plan on $100,000 to $150,000.
- It must be your money, or a properly documented gift. Borrowed funds generally do not count, and lenders trace the source.
- Up to half of the required injection can sometimes come from a seller note on full standby — no principal or interest until the SBA loan is repaid.
- Retirement funds via a ROBS structure are accepted as a valid injection.
- Home equity is a grey area: it is borrowed money, and treatment varies by lender.
The seller note route, which most buyers miss
This is the closest thing to a legitimate low-money-down acquisition. A seller who will hold a note on full standby for the life of the SBA loan can cover part of your required injection, cutting the cash you personally bring to closing. Sellers accept it more often than buyers expect, particularly when it bridges the gap between the asking price and what the bank will lend.
If you do not have the injection
- Buy something smaller. The injection scales with the price.
- Negotiate a seller note on standby, and get the standby language right.
- Bring a partner who contributes cash for equity. Note that any owner at 20% or more must personally guarantee.
- Look at a ROBS, if you have a rollable retirement balance and a specialist provider.
- Wait and save. Unromantic, and frequently the correct answer.
Questions people actually ask
Can I buy a business with no money down?
Not with SBA financing -- the 10% injection is a program rule. It happens through full seller financing outside the SBA, and occasionally through a combination of a seller note on standby plus a partner's cash. Anyone advertising routine no-money-down SBA acquisitions is misdescribing the program.
Does a seller note count as my down payment?
Up to half of the required injection can come from a seller note, provided it is on full standby -- no payments of principal or interest until the SBA loan is repaid. The lender decides whether it qualifies, and the standby agreement has to be documented correctly.
Do online lenders require a down payment?
No. Online term loans and lines of credit have no down payment because they are not funding the purchase of an asset. You pay for that convenience in the rate, which commonly runs 20% to 60% APR.