A home equity line of credit, or HELOC, lets qualifying homeowners borrow against the equity in their property — the difference between what the home is worth and what is still owed on the mortgage. For business owners, it can be one of the more flexible and competitively priced sources of capital available, precisely because it is secured by real property.
Equity, combined loan-to-value, and your limit
Lenders size a HELOC using combined loan-to-value (CLTV): the sum of your existing mortgage balance and the new line, divided by the property value. Most programs cap CLTV around 80–85%, which sets the ceiling on how much you can access.
For example, on an $800,000 home with a $450,000 mortgage, an 85% CLTV ceiling implies roughly $230,000 of available equity — before considering credit profile, income, and property type, all of which affect the final offer.
Draw period and repayment
A HELOC typically has a draw period during which you can borrow, repay, and re-borrow as needed, followed by a repayment period. Some modern HELOCs disburse a fixed amount at closing with a fixed rate and a set term, which makes payments predictable.
Because you pay interest only on what you draw, a HELOC can be an efficient standby facility — capital that is available when an opportunity appears without carrying cost when it sits unused.
What to weigh
The trade-off for competitive pricing is that your home secures the line. That makes disciplined use and a clear repayment plan essential. Consider how quickly the use of funds is expected to generate a return, and whether the draw is for a productive investment or a short-term gap.