How a business HELOC works
A business HELOC (home equity line of credit for business use) lets a company borrow against the equity in an eligible property — typically a residential investment or commercial property. Instead of receiving one lump sum, the business gets a revolving credit line: you draw only what you need, when you need it, and interest accrues only on the amount drawn. The line is usually placed as a second lien behind an existing first mortgage, so the current first-mortgage rate and terms stay intact.
How it differs from a consumer HELOC
A consumer HELOC is a personal loan secured by your primary residence and intended for personal expenses. A business HELOC is business-purpose financing: the funds must be used for the company, and the property securing the line is typically an investment or commercial property rather than your home. Because it is business-purpose credit, underwriting focuses on the property's equity, the business profile and the stated use of funds — requirements that vary by lending partner.
Common business uses
- Working capital, inventory and operating expenses
- Acquiring or improving investment or commercial property
- Renovations, build-outs and tenant improvements
- Business expansion and growth initiatives
What lending partners typically review
- Available equity in the property (loan-to-value)
- Property type, condition and occupancy
- Documented business purpose for the funds
- Time in business, revenue and overall credit profile
Initial pre-qualification uses a soft review only, with no hard credit pull. Eligibility requirements, final approval and all terms are set by the participating lending partner.
Related guides
- Business HELOCs backed by property equity
- Commercial HELOC for business property owners
- HELOC for LLC-owned property checklist
- HELOC on investment property
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No hard credit pull for initial pre-qualification. All approvals are made by participating lending partners.
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