Glossary
What is HELOC (Home Equity Line of Credit)?
A home equity line of credit is a revolving line secured by the equity in your home. Some business owners use a HELOC to fund business needs, particularly startups that do not yet qualify for business financing. HELOCs typically have a draw period followed by a repayment period, and rates are often variable. The major risk is that your home secures the debt, so if you cannot repay, you could lose it. Weigh that risk carefully before using personal real estate for business purposes.
Example
A founder draws on a HELOC to buy initial inventory before the business has a track record.
Related funding
HELOC for Business: Lower-cost funding secured by your home equity.
Related terms
Questions about an offer? Your advisor will explain every term.