Business HELOC requirements: the complete checklist

To qualify for a business purpose HELOC you need four things: a business the money will be used for, a home with equity titled in your personal name, a debt-to-income ratio at or below 50% based on income the lender can verify, and credit that clears the lender's review. Everything else is paperwork. Here is the full list, as Capova Capital's desk checks it.

1. A real business purpose

You own or co-own a business, and the money will be used for it. Funds are deposited into a business bank account, which must be open before closing. Sole owners and multi-owner companies both qualify. Personal uses — a remodel, a vacation — do not.

2. The home is titled in your personal name

The lender needs you on title as a person. If the home sits in an LLC or another company, a quit-claim deed into your own name comes first. A trust may be workable; ask before applying.

3. Equity across all liens

An existing mortgage is fine — most borrowers have one. The lender adds the mortgage balance and the new line together and compares the total with the home's value. More equity means more room. If the combined number is too high, the line is sized down rather than the file being declined.

4. Debt-to-income at or below 50%

Your monthly debt payments, including the new line, divided by the monthly income the lender can verify. It is calculated only from accounts you connect, so connecting every business and personal account matters. Under-reported income is the most common reason a file runs over the limit.

5. Credit

• A soft pull to apply, which does not affect your score.
• A hard pull once, when you accept the pre-approval offer.
• Any credit freeze must be lifted before the file can move.

6. Income verification

Income is read from your bank accounts through a secure connection (Plaid). The lender never sees your login. If the connection cannot confirm income, two years of business and two years of personal tax returns are used instead — every page and schedule, plus the IRS extension letter if the latest year is unfiled.

7. Valuation, title, and insurance

• An automated valuation from recent nearby sales and public records. A full appraisal only if that estimate cannot support the loan.
• A title review for liens, judgments, or name mismatches that need clearing before closing.
• Homeowner's insurance in place on the property.

What to have ready

1. 01A valid, unexpired government photo ID for the online notary session.
2. 02Online banking access for every business and personal account.
3. 03Your most recent mortgage statement.
4. 04Your homeowner's insurance declarations page.
5. 05A payoff statement for any lien or advance the line will retire.