Sources & Uses Builder

Business purchase price

Inventory at close

Working capital raised in

Transaction costs (legal, QoE, est. guaranty fee)

Seller note

Cash equity injection

Minority investor equity (under 20%, no control)

Financing against the target's own assets

Subordinated or mezzanine debt

The seller note is subordinated to the bank and on full standby: no principal and no interest for the life of the loan. Only then does any of it count toward the equity injection, and a note paying interest only counts for nothing.

Total Project Cost

$4,400,000

Price plus inventory, working capital, and costs

SBA Loan Request

$3,525,000

Project cost minus every other source

Injection That Counts

10.8%

$475,000, against the $440,000 required

Seller Note Share

9.1%

Your cash is 10.8% of the project

A change of ownership needs an injection of $440,000, 10% of total project cost. Cash counts in full. A seller note counts only subordinated and on full standby, and only up to half the requirement, a half it shares with any other standby debt and minority investors' money, so at most $220,000 of the note can ever help. This note contributes nothing, because it is not on full standby.

The FY2027 SBA guaranty fee on this loan request computes to about $96,641 (charged on the guaranteed portion, per the SBA's published schedule). Include it in transaction costs above if you have not already.

Compare term sheets at this loan size Track this deal in the PipelineThe address encodes your inputs, so the link restores this scenario.

A typical shape, not a rule: the proportions above shift with every deal, and the builder shows yours.

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