It depends entirely on the product. Commercial real estate loans and SBA-backed financing generally expect the owner to put money in. Equipment financing often requires nothing down because the equipment secures itself. Merchant cash advances, revenue-based financing and most short-term working capital products require no down payment at all.
Which business loans require a down payment?
A down payment is money you contribute toward a purchase so the funder is not financing 100% of it. That definition already tells you which products use one: financing that buys a specific asset usually asks for a contribution, and financing that advances working capital usually does not. Nothing is being bought in a working capital deal, so there is nothing to put a deposit against.
Commercial real estate sits at the demanding end. A funder writing a loan against a building will normally expect a meaningful share of the purchase price from the buyer, because property values move and the lender wants equity between the loan balance and a possible forced sale. Business acquisitions work the same way for the same reason — the buyer is expected to have capital at risk alongside the lender.
SBA-backed financing also involves an owner contribution, set by the lender within SBA program rules rather than advertised as a flat rate. The programs themselves are substantial: the U.S. Small Business Administration puts the maximum SBA 7(a) loan at $5 million and the maximum 504 loan at $5.5 million. Because the required injection and what qualifies as an acceptable source of it are set case by case, that is a question to put to the lender early rather than assume.
At the other end, most of what small businesses actually use day to day requires nothing down. Short-term term loans, lines of credit, invoice factoring and merchant cash advances are underwritten on revenue rather than on an asset purchase, so there is no deposit involved at any stage.
How much of a down payment do you need?
When a down payment applies, the percentage is not fixed — it is the funder's read of how much risk sits between the loan and the asset. Four things move it: what is being purchased, how long you have been in business, the strength of your revenue and credit, and how easily the asset could be resold if the deal went wrong.
Asset type does the heaviest lifting. General-purpose property that another business could occupy tomorrow supports a smaller contribution than special-purpose property built for one use, because the resale market is the funder's actual protection. The same logic runs through equipment: a standard truck, forklift or commercial oven has a resale market and can often be financed in full, while something highly customised may need money down to close the gap between purchase price and recoverable value.
Time in business is the second lever, and it is the one newer owners feel most. A business with three years of steady deposits and a clean payment history gives an underwriter history to price against. A business six months old does not, and the contribution requested tends to rise to compensate. That is not a judgment about the plan — it is the funder pricing the absence of a track record.
What if you don't have a down payment?
Not having cash on hand does not put you out of the market, but it does change which products are realistically available. The practical move is to stop trying to force the product that wants a deposit and look at the ones underwritten on revenue instead, then revisit the asset purchase once the business has more history behind it.
Equipment is the clearest example. If the constraint is a vehicle or a machine, equipment financing is frequently available with nothing down precisely because the asset is the collateral. If the constraint is working capital, products that advance against revenue ask for no contribution at all, and funding without collateral covers what qualifies you when there is no asset to pledge.
Using borrowed money as the down payment itself deserves a warning. It is sometimes possible, but many programs restrict it — SBA lenders in particular scrutinise the source of an equity injection, and borrowed funds that will be repaid out of the same business cash flow generally do not count as the owner's contribution. Stacking a second obligation underneath the first also raises the combined payment before the asset has earned anything. Our guide to business funding to cover a down payment goes through when that structure works and when it does not.
The Broker Shop is a broker, not a funder. One 2-minute application is matched to the funders in a network of 50+ whose guidelines your business meets, which is the fastest way to find out which structures are open to you without money down rather than guessing. It is free to apply, and checking your options won't affect your credit score.
Down payment, collateral and fees are not the same thing
Three different costs get called "money down" in conversation, and confusing them is how owners end up comparing offers that are not comparable. A down payment is equity you contribute toward a purchase, and you keep the benefit of it in the asset. Collateral is an asset you pledge as security — you hand over no cash, but the funder can claim the asset if the deal defaults. Fees are the cost of the financing itself and buy you nothing.
That distinction is worth applying to advertising. "No money down" usually means no equity contribution, which tells you nothing about whether the deal is secured, whether a personal guarantee is required, or what the origination fee is. A zero-down offer with a large fee deducted at funding can leave less in your account than a deal that asked for a modest contribution, so the number to compare is what actually lands in the bank against what you repay in total.
Ask three plain questions of any offer: what do I contribute up front, what is pledged or guaranteed, and what is the total repayment in dollars? Those three separate the genuinely cheap deal from the one that merely looks light at the start.
Find out which structures are open to you
Whether you need money down depends on which funders see your file. One 2-minute application is matched to the funders whose guidelines you meet. It's free, and checking your options won't affect your credit score.
See What I Qualify For →The bottom line: Match the question to the product — asset purchases and SBA-backed deals usually expect a contribution, while revenue-based working capital does not — and compare offers on what lands in your account against what you repay in total.
Sources: U.S. Small Business Administration — 7(a) loans · U.S. Small Business Administration — 504 loans