How to Navigate SBA “Credit Available Elsewhere” When You Have an Existing HELOC?

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November 17, 2025

by a searcher from Gonzaga University in Bend, OR, USA

We’re working with a local bank on a small SBA Express loan for $350,000, along with a request for a $75,000 working capital line for expansion of our current business and TIs. We also have a longstanding $116,000 HELOC on an investment property that we’ve never drawn from. The SBA is pushing back on the working capital line because the HELOC is considered “credit available elsewhere,” and they’re saying they won’t approve the WC line unless we close the HELOC. I’d prefer not to close the HELOC, and I don’t want to use it for working capital in the business. Has anyone dealt with this before or found a path forward?
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Reply by a searcher
from Mahatma Jyotiba Phule Rohilkhand University Bareilly in Denver, CO, USA
How about keep your Heloc right now and close the deal. Whatever you use from the Heloc in next 6 months can be refinanced as business loan. By that you have already proven yourself and the banks will be more comfortable with that transaction. I am in the process of doing the same for my business. Local credit union my case
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Reply by an investor
in South Riding, VA, USA
Said the same to me and it was over a brokerage account that had retirement ETF's in it. They're not completely wrong - I could do a line of credit against equities and you could use your HELOC to fund the biz. Apparently there were seeing more defaults occurring from people who were entering into the SMB world and this is their way of pushing the risk back on the searcher.
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