Capital Ally

Home equity lines of credit used for business capital

Revolving credit secured by home equity, at rates business products rarely match.

Home Equity Line of Credit overview

Typical amount
$25K to $500K
Typical term
10-year draw, 20-year repayment
Time to fund
2 to 6 weeks
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Ranges are typical for this type of financing. Your amount, term and pricing depend on the lender and your business profile.

How it works

For many owners the lowest-cost capital available is the equity in their home. A HELOC turns that equity into a revolving line with rates far below unsecured business products, interest only on what you draw, and a long draw period.

It is a personal loan secured by personal property, so the decision deserves care: the home is the collateral. Capital Ally lays out the HELOC alongside business options so you can compare total cost and risk, and places you with lenders who allow proceeds to be used for business purposes.

Best for

  • Owners with significant home equity and strong personal credit
  • Funding a business too new to qualify for business credit
  • A low-cost reserve for opportunities and emergencies
  • Consolidating expensive business debt

What businesses use it for

Startup capital

Fund the first year of a business that cannot yet qualify on its own.

Low-cost reserve

An open line at home-equity rates for whatever the business needs next.

Debt consolidation

Pay off advances and cards at a fraction of the rate.

How it compares

HELOC vs line of credit

A business line keeps the business and the home separate. A HELOC is cheaper but puts the home on the line.

HELOC vs sba loans

SBA keeps the risk in the business at a still-low rate. A HELOC is faster to draw against once open and more flexible in use.

Home Equity Line of Credit: common questions

See all questions
Can HELOC funds be used for a business?

With most lenders, yes, though some restrict use. Capital Ally works with lenders that permit business purposes.

Is the rate fixed?

Most HELOCs are variable during the draw period. Some lenders offer fixed-rate locks on portions of the balance.

What are the risks?

The home secures the line. If the business cannot service the payment, personal assets are exposed. That is the trade for the rate.

Other funding solutions

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