The Lender requires the minimum equity injection for the transaction type on total project cost (Owner Buyouts on the purchase price, real estate included pro rata or under 504 rules): for Initial Acquisitions never reduced; for Business Expansions and Owner Buyouts reducible or waivable only where liquidity and working capital are shown sufficient and the last year-end net worth is not negative, in which case no dedicated permanent working capital is lent within 90 days beyond a de minimis amount. Unlimited sources are unborrowed cash, personal loans repaid from outside the business, grants without clawback and verified prepaid expenses; limited sources (standby debt on SBA Form 155 with the note attached and no equity in the standby lender, seller debt on full standby, and non-controlling minority investments under 20% with no repayment before release of the guaranty and only tax distributions) may supply no more than half. It analyzes three years of the best available statements for the target and any operating Applicant plus comparable interims, and meets the SOP's minimum debt service coverage for the transaction type on the last year or two-year average, historical or adjusted, with each adjustment (savings, seller expenses, owner compensation backed by a global cash flow of at least 1.0) justified in the memorandum; projections cannot meet the test except for owner-occupied special purpose property fully supported by appraisal (projected coverage within two years, historical also computed). Non-standby acquisition debt with interest-only terms is tested on an amortization of no more than 10 years; the loan itself amortizes over no more than 10 years with no balloon, with a blended maturity (real estate up to 25 years) or separate loans where real estate is included.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.