Home Equity Line of Credit (HELOC) for Business Owners
Turn the equity in your home into a line of credit for your business. Borrow up to $750,000, with a line amount based on your home's appraised value and what you still owe, and a team that explains every rate and fee before you decide.
By Anthony Collin, CEO, Smart Business Funding. $500M+ funded since 2014. Published September 17, 2026. Updated October 2026. A HELOC is a partner-platform product, separate from our Direct Fund Program. See all options on business financing.
Apply directly with us and you work with us
HELOC basics, in four numbers
What homeowners with a business ask about first.
How big could your line be?
Your line amount is (home value x 0.85) minus outstanding liens on the home, up to a maximum of $750,000. Enter your numbers to see an estimate.
- The appraisal sets your home's value
- A lien search shows what is owed
- Your funding specialist confirms the final amount
HELOC line estimator
Use your best estimates.
Estimate only, for illustration. The final line amount depends on the appraisal, the lien search and approval. Maximum line is $750,000.
What a HELOC costs, in plain English
No surprises. Here is every cost, and how each one works. See how we explain costs across all our products on Transparent Terms.
Rate: 8% to 12%
Your rate depends on your credit. Your funding specialist confirms it before you decide.
Origination fee: 1.99% to 4.99%
The origination fee is added to your line amount, so you do not pay it out of pocket at closing.
Advisory fee: 6%
The advisory fee is deducted when the funds are added to your account.
Worked example: how the line amount is figured
| Appraised home value | $600,000 |
| 85% of value ($600,000 x 0.85) | $510,000 |
| Less outstanding liens on the home | - $250,000 |
| Line amount | $260,000 |
Illustration only. Not a quote or an offer. Fees apply as described above, and the maximum line is $750,000.
How a HELOC works, step by step
Four steps from application to funds. See the full walkthrough on How It Works.
Apply with us
Tell us about your home and your business. Your funding specialist is with you from the first call.
Appraisal and lien check
The appraisal sets your home's value, and the lien search shows what is owed. These determine your line amount.
Review your terms
You see your line amount, rate and fees before you decide. The initial draw sets the line amount for the life of the line.
Draw and put it to work
Funds are added to your account, less the advisory fee, and you put the capital to work in your business.
Ways to put home equity to work
Common uses for a home equity line of credit in a growing business.
Open or Expand a Location
Use the equity you have built to open a second location, renovate your space or move into a bigger one.
Browse industries
Payroll and Working Capital
Keep operations steady through slow seasons, cover payroll and take on new customers with confidence.
Business lines of credit
Renovate and Upgrade
Improvements to your property or your business space can add lasting value.
Equipment financing
Real Estate and Investments
Put equity to work on a new property, a down payment or a real estate opportunity.
Browse industries
Build on Your Equity
The value you have built in your home can become flexible capital for what comes next.
See our terms
Consolidate Business Debt
Replace several higher-cost balances with one plan. Compare every option and total cost first.
Debt consolidationEvery business is different. Your funding specialist can help you decide whether home equity is the right tool for your plans.
HELOC vs. merchant cash advance vs. bank financing
Each can be the right tool. Here is how they typically differ.
| Home equity line of credit | Merchant cash advance | Typical bank financing | |
|---|---|---|---|
| Secured by | The equity in your home | Your sales (no collateral required for Direct Fund) | Often collateral and extensive financials |
| Amount | Up to $750,000, based on appraised value and liens | $10K to $5M | Varies |
| Cost | 8% to 12% rate, plus origination and advisory fees | Factor rate and fees (see Transparent Terms) | Varies |
| Best for | Homeowners who want a larger amount against home equity | Fast funding for any business need | Established borrowers with time to wait |
Not sure which fits? Tell your funding specialist what you need. Learn more about merchant cash advances, business lines of credit and asset-based financing.
What to know before you borrow against your home
- Your home is the collateral. If you cannot repay, your home could be at risk.
- Your line amount depends on the appraisal and on what you still owe on the property.
- Fees apply: a 1.99% to 4.99% origination fee added to your line and a 6% advisory fee deducted from your funds.
- The initial draw sets the line amount for the life of the line.
- Compare every option, including options that do not use your home as collateral.
Business owners who often consider a HELOC
What to have ready
Your funding specialist will confirm the exact requirements for your situation.
Home equity line of credit questions, answered
What is a home equity line of credit for business owners?
A home equity line of credit (HELOC) is a line of credit secured by the equity in your home. Business owners who own property can use it as a source of working capital for payroll, inventory, expansion or other business needs. Your home is the collateral, so it is important to understand the terms before you decide.
How much can I get with a HELOC?
Your line amount is based on your home's appraised value and what you still owe. The formula is (home value x 0.85) minus any outstanding liens on the home, up to a maximum of $750,000. For example, a home appraised at $600,000 with $250,000 owed would support a line of $260,000.
How does the appraisal affect my line?
The appraisal sets your home's value, and the lien search shows what is owed on it. Together they determine your line amount, so the final number depends on what the appraisal comes back at and what the mortgage balance on the property is.
What interest rate will I pay?
Rates range from 8% to 12%, depending on your credit. Your funding specialist will confirm your rate before you decide.
What fees are there?
There is an origination fee of 1.99% to 4.99%, which is added to the line amount, and a 6% advisory fee, which is deducted when the funds are added to your account. Your funding specialist will walk you through every fee in writing before you decide.
What does it mean that the initial draw sets the line amount?
The initial draw is what sets the line amount for the life of the line. Plan your first draw carefully, and talk to your funding specialist about how much of your available equity you want to put to work.
Can I use a HELOC for my business?
Yes. Business owners commonly use home equity for working capital, inventory, hiring, marketing, renovations, equipment and expansion. Your funding specialist can help you decide whether it fits your plans.
What are the risks of using my home as collateral?
Because your home secures the line, missing payments could put your home at risk. Consider your cash flow, the full cost including fees, and your other options before you borrow against your home. Compare a HELOC with a merchant cash advance, a business line of credit and other financing.
How is a HELOC different from a merchant cash advance?
A merchant cash advance is based mainly on your business's sales, and our Direct Fund program does not require collateral. A HELOC is secured by the equity in your home and is sized by your home's value, so it can offer larger amounts. We offer both and can help you compare.
How do I get started?
Apply with us and tell us about your home and your business. Your funding specialist will review the property, the appraisal and any liens, explain your line amount, rate and fees, and answer your questions before you decide.
Ready to put your home equity to work?
Apply directly with us, and your funding specialist will explain your line amount, rate and fees before you decide.
A home equity line of credit is secured by your home. Line amounts, rates, fees and availability depend on the appraisal, outstanding liens, your credit, the property and your state, and are subject to approval. Examples and estimates are illustrations only and are not offers. Images are illustrative.
