Non SBA recommendation

searcher profile

February 01, 2023

by a searcher from University of South Florida in Trinity, FL, USA

Has anyone had success in using the equity in your personal home as collateral for a loan? I would like to acquire a local, established business. My challenge is that I have no liquidity but sizeable equity in my home.


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commentor profile
Reply by a lender
from Trinity College Connecticut in Boston, MA, USA
Not sure how much equity you have in your home that you could borrow from a Home Equity Line of Credit (HELOC), but I would think that would limit the size of company that you could purchase. With an SBA loan you can significantly leverage the deal (up to 90% of total deal costs) by using funds borrowed from a HELOC to provide the both the down payment, as well as the required Post Closing Liquidity that the lender will require. However, for the HELOC funds to qualify under SBA rules as an "Equity Injection", there needs to be an income source from outside of the business you are acquiring (one example is W-2 income that a spouse has from an existing job). Available to discuss at###-###-#### , or email me at redacted
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Happy to discuss various financing options at any time. From a home equity perspective, it could be your ratios are off because the lender is reporting the debt of everything that shows on your credit report and you still show responsibility for that home equity loan. You may be able to get a lender to not count that against you if you can show legally or there is a court order or divorce decree showing he has responsibility for that loan and you have been relieved from having to pay on it. Happy to discuss at any time. You can reach me here or at redacted
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