Franchise Glossary
HELOC (Home Equity Line of Credit)
What is HELOC (Home Equity Line of Credit) in franchising?
A revolving credit line borrowed against the equity in your home, often used to fund part or all of a franchise purchase. HELOCs offer access to capital at lower interest rates than most business loans and without the 60-to-90-day underwriting process that an SBA loan requires. Your home is collateral (if the business underperforms, that obligation is real), but for buyers with meaningful home equity and limited liquid savings, a HELOC is frequently the faster and less burdensome path. When combined with direct capital or a ROBS structure, it can eliminate the need for an SBA loan entirely.