Funding Method
Home Equity
Flexible, relatively low-rate capital from the equity in your home — with your residence as collateral.
For homeowners with significant equity, a home equity line of credit (HELOC) or a cash-out refinance can be a flexible, relatively low-cost way to fund part of a franchise investment. It is often used to supplement other sources rather than as the sole funding method.
How it works
A HELOC gives you a revolving line of credit secured by your home, which you can draw on as needed during the project. A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash. Both convert home equity into available capital; both use your residence as collateral.
Who it tends to fit
It tends to fit homeowners with substantial equity who want flexible access to capital at a lower rate than unsecured borrowing, and who are comfortable with the tradeoff of securing business funding against their home.
What to watch for
The central risk is straightforward: your home is the collateral. HELOC rates are often variable, so payments can rise. Borrowing against your residence to fund a business raises the personal stakes meaningfully — weigh it carefully and consider how it fits alongside other sources before committing.
Common Questions
Questions about home equity
Want help mapping funding to your situation?
Thirty minutes. No pitch. We will talk through what concepts fit your capital and how funding usually comes together.