SBA 7(a) basics for an e-commerce acquisition
The 7(a) program is SBA's main business loan program. SBA doesn't lend directly: it guarantees part of a loan made by a participating lender, and you apply through that lender.[1] "Changes of ownership (complete or partial)" are an approved use of 7(a) proceeds, which is what buying an existing store is.[1]
- Loan size: most 7(a) loans go up to $5 million; SBA Express is capped at $500,000.[2]
- Guarantee: SBA guarantees up to 75% of loans above $150,000 (85% at or below).[2]
- Term: generally 10 years or less unless the loan finances real estate or long-lived equipment (25-year maximum including extensions).[2]
- Rate: negotiated, but capped. Variable-rate loans above $350,000 are capped at the base rate plus 3.0%.[2]
- Eligibility: an operating, for-profit business located in the U.S., small under SBA size standards, not an ineligible type, and able to show it can repay.[1]
The 10% equity injection
For a complete change of ownership, SOP 50 10 8 (effective June 1, 2025) requires the buyer to inject at least 10% of total project costs.[3][4] Total project costs aren't just the price: closing costs and any working capital you finance count too, so budget for 10% of the whole package.
Why seller notes matter
Seller financing is common in e-commerce deals, but under the current SOP a seller note only counts toward your 10% if it is on full standby, meaning no principal or interest payments for the entire SBA loan term, and it can cover at most half of the required injection.[4] A seller who agrees to wait that long is also signaling confidence in the business, which is worth asking about on any listing.
Debt service coverage (DSCR)
Lenders judge whether the business's cash flow can cover all debt payments, including the new SBA loan. The SOP sets 1.15 as the minimum debt service coverage for Standard 7(a) loans, and lenders can require more.[3] Coverage = annual cash flow available for debt ÷ annual debt payments. Remember the business may also need to pay you or a manager.
Worked example
Assume a store listed at $800,000 with $280,000 in annual seller's discretionary earnings (SDE). To keep the math simple, assume total project cost equals the price (real deals add closing costs, the SBA guaranty fee and working capital).
| Equity injection (10%) | $80,000 |
| …of which a full-standby seller note could cover at most half | up to $40,000 |
| …so buyer cash of at least | $40,000 |
| SBA 7(a) loan | $720,000 |
| Payment at an assumed 10.5%, 10 years | $9,715/mo · $116,584/yr |
| Coverage on SDE ($280,000 ÷ $116,584) | 2.40× |
| Coverage after a $90,000 manager/owner salary | 1.63× |
The 10.5% rate and the salary are assumptions for illustration. Your lender sets the rate, fees and how it adjusts cash flow.
How to use StoreExit before you call a lender
- Run the deal check. Enter the listing's price, SDE and channel mix to see whether the multiple sits inside the range of current public asking multiples, plus the SBA payment and coverage.
- Check price cuts and days on market. A listing that has been cut, or has sat for months, may leave room to negotiate. Look at whether profit is holding up, too: a lower price on falling earnings isn't a discount.
- Confirm SBA fit. StoreExit flags obvious issues like a non-U.S. entity. Only a lender can confirm eligibility.
Run the deal check →Open the SBA loan calculatorSee today's price cuts
FAQ
How much do I need to put down to buy an e-commerce business with an SBA loan?
For a complete change of ownership, SBA SOP 50 10 8 requires an equity injection of at least 10% of total project costs. Total project costs can include more than the purchase price, such as closing costs and working capital in the request.
Can a seller note count toward my down payment?
Only partly. Under SOP 50 10 8, a seller note counts toward the required injection only if it is on full standby (no principal or interest payments) for the life of the SBA loan, and it can cover no more than half of the required injection.
What is the maximum SBA 7(a) loan amount?
Most 7(a) loans have a maximum of $5 million. SBA Express loans are capped at $500,000.
How long is the repayment term?
A 7(a) loan term is generally 10 years or less unless it finances real estate or equipment with a longer useful life, with a maximum of 25 years including extensions. Most online-business acquisitions have no real estate.
What interest rate will I pay?
The rate is negotiated with the lender but capped by SBA. For variable-rate loans above $350,000 the cap is the base rate plus 3.0%. SBA publishes maximum fixed rates separately.
What debt service coverage do lenders look for?
SBA's SOP sets 1.15 as the minimum debt service coverage for Standard 7(a) loans; your lender can be stricter. StoreExit's calculator uses 1.25 as a more conservative check.
Does an Amazon FBA or Shopify store qualify?
SBA eligibility depends on the business, not the platform. It must be an operating, for-profit business located in the U.S., small under SBA size standards, not an ineligible type, and creditworthy. The lender and SBA make the final call.
Sources
- SBA: 7(a) loans
- SBA: 7(a) terms, conditions and eligibility
- SBA: SOP 50 10, Lender and Development Company Loan Programs
- Whiteford, Taylor & Preston: SBA issues SOP 50 10 8, key changes to 7(a) lending
SBA rules change. Confirm current requirements with an SBA lender before you make an offer.