Can I use a HELOC to fund my business?

Yes. Many owners draw on a home equity line of credit and use the funds in their business — for payroll, inventory, or expansion. The line is secured by your home, not the business, so it's typically cheaper than unsecured business funding.

Why is a HELOC cheaper than a business loan?

Because your home secures the line, the lender's risk is lower, so the rate is lower — usually around prime plus a margin, well below the rates on unsecured business financing where there's no collateral.

What happens to my home if I can't repay?

A HELOC is secured by your home, so defaulting puts the home at risk — the lender can foreclose, even though the money funded your business. Only borrow against home equity when you're confident in repayment.

Will checking my options affect my credit?

No. Checking options through WithFunded is a soft inquiry with no impact on your credit score. A hard inquiry generally happens only at formal application with a lender you choose.

WithFunded › Home Equity Line of Credit

HELOC for business owners: lower-cost funding secured by your home equity

A home equity line of credit lets you borrow against the equity in your home and put it to work in your business. Because your home secures the line, rates are typically lower than unsecured business funding — but your home is the collateral.

A WithFunded guide · Rates as of November 2026 · Updated quarterly

Quick facts

Best for: Owners with home equity who want the lowest available rate
How you pay: Interest only on what you draw; revolves as you repay
Collateral: Your home — it secures the line and is at risk if you default
Rate basis: Typically prime (currently 7.00%) plus a lender margin — usually well below the 8%–30% range on unsecured business financing
Funding speed: Longer than unsecured options — expect a home appraisal and title work
Credit fit: More equity and stronger credit mean higher limits and better pricing

How a HELOC works

A home equity line of credit is revolving credit secured by the equity in your home — the difference between what your home is worth and what you still owe on it. You're approved for a limit, draw what you need, repay it, and draw again. As with a business line of credit, you pay interest only on the amount you've drawn, not the full limit.

Business owners use a HELOC to put that home equity to work in the company: covering payroll, buying inventory, or funding an expansion — often at a lower rate than unsecured business financing.

Why the rate is lower

Unsecured business funding is priced for risk: with no collateral, lenders charge more, which is why our representative band runs 8%–30% APR. A HELOC is secured by your home, so the lender's risk is lower and so is the rate — typically prime (currently 7.00%) plus a margin. At a representative rate of about prime plus two points (≈9%), here's the monthly interest on a carried draw before any principal paydown:

Carried draw	Approx. monthly interest (≈9%)
$25,000	$188
$50,000	$375
$100,000	$750

Interest-only illustration at an example rate of prime + 2 points; actual HELOC rates, margins, and fees are set by the lender. WithFunded calculation.

The trade-off: your home is the collateral

The lower rate comes with real risk. A HELOC is secured by your home, which means if you can't repay, the lender can foreclose on it — even though the money funded your business. Borrow against home equity only when the business need is sound and you're confident in repayment. Many owners weigh a HELOC against unsecured options that don't put their home on the line.

HELOC vs. a business line of credit

Choose a HELOC if…

You have meaningful equity in your home
You want the lowest available rate
You're comfortable using your home as collateral

Choose a business line of credit if…

You'd rather not risk your home
You want funding tied to the business, not personal property
You need to move faster than a home appraisal allows

Qualifying

Lenders look at your home equity, credit, and ability to repay. Checking your options through WithFunded uses a soft credit inquiry, which does not affect your credit score; a hard inquiry typically happens only when you make a formal application with a chosen lender.

Frequently asked questions

Can I use a HELOC to fund my business?: Yes. Many owners draw on a home equity line of credit and use the funds in their business — for payroll, inventory, or expansion. The line is secured by your home, not the business, so it's typically cheaper than unsecured business funding.
Why is a HELOC cheaper than a business loan?: Because your home secures the line, the lender's risk is lower, so the rate is lower — usually around prime plus a margin, well below the rates on unsecured business financing where there's no collateral.
What happens to my home if I can't repay?: A HELOC is secured by your home, so defaulting puts the home at risk — the lender can foreclose, even though the money funded your business. Only borrow against home equity when you're confident in repayment.
Will checking my options affect my credit?: No. Checking options through WithFunded is a soft inquiry with no impact on your credit score. A hard inquiry generally happens only at formal application with a lender you choose.

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What our clients say

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Terry Gossman, Oct 29, 2026Landon and Austin were greatLandon and Austin were great. Knowledgable and explained everything in a way that made it all really easy to understand. I avoid these call like the plague but these two were a joy to work with.

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Rate figures are prime-anchored illustrations (prime plus an example margin), not quotes; actual HELOC pricing is set by the lender and depends on your home equity and credit.

Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.