HELOC for SBA Loans?

by a searcher from Cabrini College

7 months ago

I’ve read anecdotally that taking out a HELOC on a secondary home (maybe even primary?), prior to closing on an SBA loan can help shield some assets. Is there any validity to this or does anyone have any clarity as to the logic of why this would be the case, if true? Thanks for any help!

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searcher from The University of Michigan - Stephen M. Ross School of Business

Great feedback in the comments above; I took out a HELOC to limit the likelihood of a lien on my home (although as mentioned, it varies by lender). If you are interested, I wrote up a summary of what I saw when I was shopping around recently for the best HELOC rates and high LTV lenders here: https://www.searchfunder.com/article/viewarticle/46515

7 months ago | like reply | 0 likes

investor from Ivey Business School at Western University

PSA: When the SBA does not take out a lien on your home, it still has an unsecured claim on it nonetheless. A personal guarantee is a personal guarantee (assuming the house is in your name).

7 months ago | like reply | 0 likes

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