Home equity for business
Home Equity Line of Credit for Business Owners
Tap the equity in your home to fund your business — up to $750,000, 10-to-30-year terms, a soft-pull pre-qualification in minutes and funding in as few as five business days, without touching your current mortgage rate. RAN Funding pre-qualifies you and connects you to the lender.
What Is a Business-Purpose HELOC?
A business-purpose home equity line of credit is a standalone line secured by your home, with the funds used for your business: working capital, paying off expensive advances, equipment, inventory, or buying a business. It sits behind your existing mortgage, so you keep your current rate. Lines run from $25,000 to $750,000 with terms of 10, 15, 20 or 30 years, pre-qualification is a soft credit inquiry, the application is 100% online, and funding typically lands in as few as five business days. Because the home is the collateral, pricing is well below unsecured business products — and the trade is that your home is on the line. RAN Funding is a broker, not the lender: we pre-qualify you, compare it against the other products you qualify for, and get you to the secure application.
Your Home’s Equity, Working for Your Business
Most business owners who own a home are sitting on capital that costs a fraction of what their business pays for short-term money. A business-purpose HELOC unlocks it without refinancing the first mortgage: the line sits in second (or third) position, the whole amount funds at closing, and you can redraw as you pay it down.
We built this into our lineup for one reason: owners kept asking us to consolidate expensive positions, and for homeowners this is often the cleanest way to do it. A specialist tells you honestly whether it beats the business products you also qualify for.
What to Have Ready Before You Apply
For Pre-Qualification
- Property address and type
- Estimated home value
- Balance of any mortgages or liens
- Your credit score range
- Line amount and business purpose
For the Online Application
- Government-issued ID
- Bank, payroll or tax-return login to verify income automatically
- Your business bank account (680+ credit)
- A device with a camera for the online notary
- Spouse available to sign, in community-property and homestead states
Check Your Options
Two minutes. A funding specialist reviews your home equity pre-qualification and calls within one business day with your options and the secure application link. Soft inquiry only.
Who This Is For
Homeowners who run an established business and want long-term capital at home-equity pricing: to retire expensive advances, buy equipment, expand, or fund a purchase. If you do not own a home, or your property is in a state we do not serve, a business line of credit or term loan is the right place to start.
What Happens Next
A specialist confirms the property and state fit, sizes the line, and sends the lender’s secure link. You complete the application online, review the written offer, sign with an online notary, and funds arrive by ACH.
The Complete Guide to Business-Purpose HELOCs
How a Business-Purpose HELOC Works
A home equity line of credit lets a homeowner borrow against the equity in their property. A business-purpose HELOC is the same instrument put to work for the business: the home secures the line, the funds go into the business, and the rate reflects the collateral rather than the business’s bank deposits. For an owner who has paid down a mortgage over the last few years, it is often the cheapest capital available — and it leaves the existing first mortgage, and its rate, untouched.
- Pre-qualify in minutes. Property state, home value, mortgage balance, credit range and the amount you need. Soft inquiry only.
- Complete the online application. Identity verification, automated income verification (bank, payroll or tax-return linking) and an automated property valuation. A full appraisal is ordered only on larger lines.
- Review your offer. Line amount, term (10, 15, 20 or 30 years), rate and the one-time origination fee that is included in the line — nothing out of pocket.
- Sign with an online notary. A video session from your home; a few counties still require a wet signature, which is scheduled for you.
- Funds arrive. The full line is drawn at closing and deposited by ACH, typically within five business days of signing. As you pay it down, you can redraw up to the limit during the draw period.
What a business-purpose HELOC looks like
Timelines are typical for complete applications on a primary residence, which carries a three-day rescission period. Investment and second-home lines have no rescission period.
What Business Owners Use It For
- Working capital at a fraction of the cost of daily-pay advances.
- Paying off expensive business debt. Consolidating merchant cash advances or high-rate positions into one amortizing payment is the single most common use we see.
- Equipment, build-outs and expansion without an equipment lien.
- Inventory ahead of a season or a large order.
- Buying a business or buying out a partner — often as the equity injection an SBA lender requires.
- A permanent reserve. Draw, repay, redraw: the line stays open for the draw period, so it works as standing liquidity.
HELOC vs Business Line of Credit vs Term Loan vs SBA
| Business-purpose HELOC | Business line of credit | Business term loan | SBA loan | |
|---|---|---|---|---|
| Secured by | Your home | Business assets / UCC | Business assets / UCC | Business assets, personal guarantee |
| Amount | $25K–$750K | $10K–$2M | $20K–$5M | $50K–$5M |
| Term | 10–30 years, amortizing | 12–36 months | Up to 3 years | 5–25 years |
| Rate basis | Home-equity pricing; fixed or variable | Business-credit pricing | Business-credit pricing | Prime + capped spread |
| Credit | 640+ | 650+ | 600+ | 680+ |
| Underwritten on | Home equity, credit, income | Bank deposits, revenue | Bank deposits, revenue | Tax returns, cash flow |
| Time to fund | As few as 5 business days | 48–72 hours | 24–72 hours | 30–60 days |
| Redraw | Yes, during the draw period | Yes | No | No |
| Prepayment penalty | None | Varies | Varies | Only on 15-year+ loans |
The trade-off is plain: the HELOC is cheaper and longer than any unsecured business product because your home is the collateral. If the business cannot make the payment, the home is at risk. That makes it the right tool for a planned, productive use — retiring expensive debt, buying equipment that earns, funding a purchase — and the wrong tool for a business that is struggling to cover its existing obligations. A specialist will tell you which side of that line you are on.
Requirements
| Requirement | Typical |
|---|---|
| Property | Single-family home, townhome, PUD, condo, duplex or 2–4 unit property that you own; primary residence, second home or investment property |
| Not eligible | Co-ops, manufactured housing, mixed-use or commercially zoned property, properties over 20 acres, homes with a reverse mortgage, homes bought in the last 90 days, homes currently listed for sale (above $400K) |
| Credit score | 640+ for most programs; 600+ on a primary residence with lower limits |
| Equity | Enough that the new line plus existing mortgages stays inside the lender’s combined loan-to-value limits (up to 85% on a primary residence for the strongest files) |
| Income | Verified automatically by linking a bank account, payroll or tax returns; business bank accounts can be used for owners with 680+ credit |
| Debt-to-income | Under roughly 50% after the new payment |
| Ownership | Individual, joint, revocable trust, or an LLC in most states (an LLC owner needs at least 25% ownership) |
| Identity | Valid government ID; a Social Security number is required, citizenship is not |
| Minimum line | $25,000 ($35,000 in Texas) |
Property-specific rules apply in New York and Texas (for example, Texas does not allow LLC ownership or liens behind a second mortgage on a homestead), and condominiums in Florida carry a lower loan-to-value limit. A specialist confirms the fit for your property before you apply.
Where It Is Available
Through RAN Funding, the business-purpose HELOC is currently available on properties in these 35 states and Washington, D.C.:
Not currently available through RAN Funding in California or in states not listed. If your property is elsewhere, our business line of credit and term loan programs are available nationwide.
How Much Income Do You Need?
Underwriting caps your debt-to-income ratio at 50%, and that includes the new line payment. In plain terms, your gross monthly income has to be at least double your total monthly debt payments: everything already on your credit report plus the estimated payment on the new line.
| Monthly | Annual (×12) | Minimum income at 50% DTI (×24) | |
|---|---|---|---|
| Current monthly debt | $10,000 | $120,000 | $240,000 |
| Estimated new line payment | $250 | $3,000 | $6,000 |
| Total monthly obligation | $10,250 | $123,000 | $246,000 |
In this example the borrower needs to verify about $246,000 in gross annual income to take the full line. Two rules make this more forgiving than it looks:
- Automatic downsizing. If you cannot verify enough income for the full line, you are not simply declined. You are shown smaller offers with lower payments that fit the income you did verify.
- You only verify what the offer needs. You have to document enough income to satisfy the 50% rule for the line amount you choose, not every dollar you earn. Owners who pay themselves lightly on paper can still qualify for a line sized to the income they can show.
Your specialist runs this number on the pre-qualification call, so you know before you apply whether to expect the full line or a smaller one.
What It Costs
Three things define the cost: the rate (fixed or variable, set by the lender from your credit, equity and lien position), a one-time origination fee that is financed into the line rather than paid at closing, and nothing else — no application fee, no appraisal fee on most lines, no annual fee and no prepayment penalty. Signing up for autopay earns a rate discount. Your specialist walks through the written offer line by line before you sign, and compares it to the business products you also qualify for.
What to Weigh Before You Use Your Home
- Your home is the collateral. Missed payments put it at risk in a way an unsecured business loan does not.
- The full line is drawn at closing. Interest starts on the whole amount from day one, so size the line to what the business will deploy.
- It sits behind your mortgage. Selling or refinancing the home later means paying the line off.
- Spouses may need to sign in community-property and homestead states, even if they are not on the business.
- Use it for a productive purpose. Retiring 1.3-factor advances with a long-term amortizing line is a good trade; funding losses is not.
Business HELOC Questions, Answered
What is a business-purpose HELOC?
A home equity line of credit where the funds are used for business purposes rather than personal ones. It is secured by your home, so it carries lower rates and longer terms than unsecured business products, and because it is a business-purpose loan it is underwritten with the business use in mind. The lender still qualifies you on your credit, your equity and your income.
Can I use a HELOC for my business?
Yes. Working capital, paying off expensive business debt, equipment, inventory, expansion, buying a business or buying out a partner are all eligible business purposes. The funds must be used for the business, not for personal expenses.
How much can I get?
Lines from $25,000 up to $750,000, depending on your home’s value, the balance of any existing mortgages, your credit score and the state. Most approved lines fall between $50,000 and $400,000.
How fast is funding?
Pre-qualification takes minutes with a soft credit inquiry. The full application is online and, once approved and notarized, funds are typically available in as few as five business days (a three-day rescission period applies on a primary residence).
Does checking my options affect my credit?
No. The pre-qualification is a soft inquiry. A hard credit pull happens only when you decide to proceed with the full application.
What credit score do I need?
Most approvals start at a 640 FICO score; stronger scores unlock larger lines and higher loan-to-value limits. Some options exist from 600 on a primary residence with lower limits.
Can I keep my current mortgage rate?
Yes. This is a standalone line of credit that sits behind your existing mortgage. You do not refinance your first mortgage or give up its rate.
Is there a prepayment penalty?
No. You can pay the line down or off at any time, and as you pay it down you can redraw up to your credit limit during the draw period.
Which states is it available in?
Through RAN Funding it is available in 35 states plus Washington, D.C. (listed on this page). California, and a small number of other states, are not available through us at this time.
Is RAN Funding the lender?
No. RAN Funding is a business financing broker. The line is originated and serviced by a lending partner; RAN Funding pre-qualifies you, explains how the product compares to your other options, and gets you to the secure application. Final terms, approval and funding are determined by the lender.
How much income do I need for a business HELOC?
Enough that your gross monthly income is at least double your total monthly debt payments, including the new line. A quick estimate: (current monthly debt + estimated line payment) × 24 = the minimum annual income for the full offer. If you verify less, you are shown a smaller line that fits rather than declined outright, and you only need to verify enough income for the amount you choose.
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RAN Funding is a business financing broker, not a lender. The home equity line of credit described on this page is originated, underwritten, funded and serviced by a third-party lending partner; availability, line amounts, rates, fees, terms and approval are determined by that lender and vary by state, property and applicant. Funds must be used for business purposes. Your home secures the line. Figures on this page are typical program parameters as of October 2026 and are not an offer of credit. Reviewed 14 October 2026.