Business HELOC

Yes. A HELOC secured by your primary residence can be used for business expenses including working capital, equipment, expansion, debt consolidation, or any other legitimate business purpose. There is no legal restriction on using home equity for business needs. Interest paid on a HELOC used for business may also be tax-deductible. Consult your tax advisor for guidance specific to your situation.

After approval and document submission, funds can be available in as little as 24 hours. The online application takes about 5 minutes, and most applicants receive a decision the same business day. It’s worth noting that HELOC can take longer than many of our products.

Your primary residence serves as collateral for a HELOC. This is what enables the lower rate relative to unsecured business financing, because the lender has recourse to your home if the financing is not repaid. This is an important consideration: draw responsibly and maintain a repayment plan that ensures your home is not at risk.

The available credit limit is based on your home’s appraised value, your existing mortgage balance, and the lender’s loan-to-value requirements, typically allowing you to borrow up to 85% of your home’s appraised value minus any existing mortgage balance. Contact our team with your home value and mortgage balance for a preliminary estimate of your available credit.

A HELOC is revolving: you draw what you need, repay it, and draw again, with interest charged only on the outstanding balance. A home equity loan is a lump sum loan with a fixed repayment schedule, similar to a term loan. For business owners who have ongoing or variable capital needs, a HELOC is generally more flexible and efficient. For a specific one-time purchase, a home equity loan may be a better fit.

Most HELOCs carry a variable interest rate tied to a benchmark rate, typically the prime rate. This means your rate may change over time as market rates move. Some HELOCs offer a fixed-rate option for a portion of the balance. Your specific rate structure will be outlined in your financing offer. Ask your funding specialist about rate options when reviewing your application.

Interest on a HELOC used for business purposes may be tax-deductible as a business expense. The deductibility rules depend on how the funds are used and your specific tax situation. Consult your tax advisor or CPA before making decisions based on tax treatment. The rules around HELOC deductibility have changed in recent years and depend on the specific use of proceeds.

Yes. A HELOC is typically structured as a second lien on your property, behind your existing primary mortgage. Your available credit limit is based on the equity remaining after your mortgage balance. For example, a home worth $500,000 with a $250,000 mortgage has $250,000 in equity, and you might qualify for a HELOC up to 85% of the home’s value minus the existing mortgage.

If you sell your home while a HELOC is outstanding, the HELOC balance must be paid off at closing, typically from the sale proceeds along with your primary mortgage. Before selling, confirm the outstanding HELOC balance and factor it into your closing calculations. If you are planning to sell your home in the near term, a HELOC may not be the right financing vehicle for your business needs.

The primary differences are speed, flexibility, and qualification criteria. Banks typically require 2 to 8 weeks for approval, a hard credit pull, and often a FICO score above 680. SBG Funding makes same-day decisions, performs no hard credit inquiry, and accepts FICO scores of 500+. We evaluate more than 50 factors, including your revenue history and deposit patterns, rather than relying primarily on credit score. A HELOC is secured by your home, so collateral does apply to this product; most of our other products are unsecured.

To get started, you need your 4 most recent business bank statements and basic information about your home, including estimated value and current mortgage balance. For the full HELOC application, you will also need personal tax returns, a recent mortgage statement, and documentation of your home’s value. Our team will provide a complete checklist after the initial review.

Yes. Many business owners use a HELOC alongside other SBG Funding products. For example, a HELOC for lower-cost capital reserves and a business line of credit for day-to-day operational cash flow. Contact your funding specialist to discuss the right combination for your situation.