HELOC for SBA Approval

searcher profile

August 01, 2023

by a searcher from Texas A&M University in Cedar Park, TX, USA

I am considering getting a HELOC for SBA approval to purchase a service business. Anything to watch out for or pitfalls I should be aware of before I go that route?

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Reply by a searcher
from Florida International University in Charlotte, NC, USA
I did a HELOC 3 months before purchasing my business but didn’t use the funds for down payment or even draw on the funds. I did it solely to take up the excess equity in my home. The bank will usually count the full amount of the HELOC in your global debt coverage calculation, but the benefit is that since my equity was taken by the amount of the HELOC, the SBA didn’t require a lien on my primary residence. Still have the PG, but not having the lien on my home made me feel better

Also way easier to get any type of home loan before you become self employed
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Reply by a lender
from Pennsylvania State University in Tampa, FL, USA
Hi ^redacted‌ as others have commented make sure that there is an outside repayment source other than the subject Acquistion. If you have any high-level questions or simply would like to have options when the time is right, please reach out. I've done quite a few home-services business acquisitions this year and would be happy to have a no obligation conversation to address strategy and structure. Feel free to reach out at###-###-#### or redacted
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