Hello, SF community.

With home prices increasing like they have, I've amassed a pretty good amount of equity in my home, like I'm sure we all have. I'm curious if anyone has ever used a HELOC as the downpayment for a SBA loan. I currently don't have any additional income as I am pursuing a "self-funded" search full time. Prior to quitting the day job, I lined up a $200k LOC I haven't drawn on yet. I have some other cash savings for living expenses around $80k. Retirement is about $150k in IRA's. I have no other personal debt, except the main mortgage and a car payment.

So again, the question is, do you think anyone will lend on this situation? Let's assume the acquisition target has healthy cashflow and can safely cover the debt, included my personal LOC payment. Let's also assume the purchase price of the business is ~$1.5M at $500k EBITDA (I know 3x multiple is wishful thinking). So, I'd put the ~$150k of the LOC towards 10% down, and then perhaps let's say I get the seller to take 5-10% financing on top of that. I've heard this might not work because of stacking debt, but still curious to hear feedback.

I'd love to avoid any criticism on my personal situation financially or comments directed at whether this is a good idea or not. That's not what I'm asking. What I'm asking is if anyone has experience to say if I could get SBA funded given these circumstances. If I missed any info that would be needed to advise on this situation, please let me know.