How a commercial HELOC works
A commercial HELOC is a business-purpose home equity line of credit secured by commercial or investment property. Instead of a one-time lump sum, you receive a revolving credit limit: you draw only what you need, when you need it, and pay interest only on the amount drawn. The line is recorded as a second lien behind your existing first mortgage, which means your current first-mortgage rate and terms stay intact.
Who typically qualifies
Participating lending partners generally review four areas when evaluating a commercial HELOC request:
- Available equity in an eligible commercial or investment property (loan-to-value)
- Property type, condition and, for income properties, rental performance
- A clear business purpose for the funds
- Time in business, revenue and overall credit profile
Initial pre-qualification uses a soft review only — there is no hard credit pull to see your available options. Final approval and terms are always determined by the participating lending partner.
Common business uses
- Acquiring or refinancing commercial and investment properties
- Renovations, build-outs and tenant improvements
- Working capital, inventory and payroll during growth periods
- Drawing funds only when needed, and paying interest only on what you draw
How it differs from a consumer home-equity loan
A consumer home-equity loan or HELOC is designed for personal expenses and is regulated as consumer credit. A commercial HELOC is business-purpose financing: the funds must be used for your business, the underwriting focuses on the property and the business profile, and the line is structured for commercial needs such as acquisitions, renovations and working capital. If you are looking for personal home-improvement or debt-consolidation financing, a business-purpose program is not the right fit.
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No hard credit pull for initial pre-qualification. All approvals are made by participating lending partners.
Continue to Pre-Qualification