The capital you already have
Most business owners who own a home are sitting on more capital than any lender will offer them.
As of mid-2026, mortgage holder equity hit $18 trillion. Of that, 47.5 million mortgage holders had $11.7 trillion they could borrow against, about $212,000 each.
That equity is trapped. It does not pay payroll, buy a truck, or close an acquisition. It just sits in the house and grows with the market.
A home equity line of credit is the tool that releases part of it. For a business owner, it changes the math on nearly every other financing decision.
What it costs compared to everything else
The reason a home equity line is cheap is the reason it is risky. The lender holds a lien on your house.
| Speed | Cost | Collateral | |
|---|---|---|---|
| Business HELOC | Days. Figure says funding in as few as 5 business days | Fixed rates from about 7.9% for strong credit to about 13% | Your home |
| SBA 7(a) loan | 3 to 6 months, per Kapitus | Negotiated with the lender, capped by the SBA | Business assets, often a personal guarantee |
| Short-term loan or revenue-based financing | Days | A 1.30 factor over 12 months is about 54% APR | A personal guarantee, sometimes a lien on business assets |
| Business credit card | Immediate | Varies. Our interest guide illustrates 21% APR | Usually a personal guarantee |
A home equity line can rival the rate of a bank or an SBA loan and arrive in days rather than months. No other product on the list does both.
A worked illustration
$100,000 for the business, used for 12 months, then paid off. The HELOC rate is a strong-credit, 10-year figure from our primary lender’s pricing.
| Business HELOC at 8.5% over 10 years | $100,000 advance at a 1.30 factor | |
|---|---|---|
| Monthly payment | $1,240 | $10,833, paid as $2,500 a week |
| Cost in the first 12 months | $8,246 in interest, plus up to $4,990 origination | $30,000 |
| Paying it off at month 12 | Saves the remaining interest | Saves nothing without a discount |
At 12% APR, a less favorable rate, the first-year interest is $11,703 and the monthly payment is $1,435. Still a fraction of the advance.
One caution. Let the 10-year line run its full term and the interest is $48,783. The rate is low. The clock is long. Pay it down.
The risk, stated plainly
- Your home is the collateral. If you cannot pay, the lender can foreclose. A failed business does not cancel the debt.
- It is personal debt. It reports on your personal credit, behind your first mortgage.
- Some lines fund in full at closing. Figure’s does. Interest runs on the whole line from day one, so size it to what you will use.
- The origination fee is real money. 4.99% of the draw buys the lowest rate. A lower fee means a higher rate.
- Life changes. Selling the house means paying off the line. Losing personal income means the payment still comes due.
Put a hard number on what the business can carry in a slow month before you sign.
Which properties can secure it
Through the business-purpose program we offer with Kapitus and Figure:
- Your primary residence
- A second home
- A residential property with up to 4 units, including a rental
A building with 5 or more units is commercial property and does not qualify. Neither do co-ops or manufactured homes. In New York and Texas, a property held in an LLC does not qualify; elsewhere it can.
The line is offered in all 50 states and DC. In 15 states, New Jersey among them, the file goes through a licensed mortgage broker, and a few states require an in-person closing. The Business HELOC page lists them.
This is a business-purpose line. The money has to go to the business.
Using it to replace expensive debt
The most common use we see is the simplest one: replace short-term financing that costs 50% APR or more with a line that costs a fraction of that.
Two checks first:
- Ask the lender you are leaving whether the payoff qualifies for a prepayment discount. Our guide to early payoff discounts explains why that can change the payoff by thousands.
- Do not refill the expensive debt. A home equity line that pays off an advance, followed by a new advance, leaves you with both.
When it fits
- A use with a return you can estimate: buying a practice or a competitor, equipment, a build-out, or consolidating short-term debt.
- Real equity and steady personal income.
- A business that can cover the payment from cash flow in a slow month.
What it takes: a credit score of 600 or higher for a line behind your mortgage, 640 if the line will be the only mortgage on the home. How much of the home’s value you can borrow depends on credit: up to 75% with a score under 660, 80% at 660, 85% at 680, 90% at 720. The Business HELOC page has the rate table.
When it does not
- The business is losing money. Financing a loss against your house makes two problems out of one.
- You may move within a few years.
- The business qualifies on its own. If a line of credit or an SBA loan will do, keep your home out of it.
How it works through us
We offer the Business HELOC, a business-purpose line, through our primary lender, Kapitus, with Figure. Figure says approval can take as little as 5 minutes and funding as few as 5 business days, with an online closing in most states.
- Fill out our short form. It tags your request as a Business HELOC.
- Complete the full application with Kapitus. What you gave us carries over.
- A specialist confirms the property and the use, and you complete Figure’s application online.
- Close, online in most states, and receive the funds.
The Business HELOC page has the current figures and requirements.
Sources
- ICE Mortgage Monitor: Mortgage Holder Equity Climbs to Record $18 Trillion, August 10, 2026
- Figure, headline HELOC figures, checked October 13, 2026
- Rates: our primary lender’s pricing for this program, dated September 2, 2026
- The Mortgage Reports: Figure Review, updated February 12, 2026
- Kapitus: SBA Loans, checked October 12, 2026, for SBA timing
- Our factor rate vs APR guide for the 54% APR figure