Compare business equity loans to secure funding with property you own

Compare business equity loans

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money.

Use your residential or commercial property as security for your business loan.

Using your property as security isn’t just reserved for home loans. You can also use any equity you have in your home, or even commercial real estate, as security for a business loan. By doing so, you might be able to take advantage of discounted interest rates and fees from a range of lenders. Find out what’s involved in this process, and how to compare business equity loans to find the right option for you.

LoanBuilder, A PayPal Service Business Loans

Our top pick: LoanBuilder, A PayPal Service

Customizable business loans with no hidden fees.

  • Min. Amount: $5,000
  • Max. Amount: $500,000
  • One-time fixed fee charged over the life of the loan
  • Acclaimed customer service
  • Requirements: $100,000+ annual revenue, 1+ years in business, 600+ personal credit score

    How do business equity loans work?

    Business equity loans require you to put up a property as security to take out a business loan, but you don’t have to own the property outright. Rather, you can use the amount of equity you own in the property as security for the loan. For example, if you own a $350,000 property and have $100,000 left to pay on your mortgage, you will have $200,000 of equity in the property, and therefore be able to put up $200,000 worth of security.

    As this is a business loan, you will be required to submit a business proposal to the lender who will then determine whether this will be a good investment. Business equity loans offer similar features to home loans, such as variable and fixed rate loan options, interest-only repayments and valuation requirements for the property you will use as security.

    Top business loan lenders you can compare

    Rates last updated August 16th, 2018
    Unfortunately, none of the business loan providers currently offer loans for these criteria.
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    Kabbage Small Business Line of Credit
    A simple, convenient online application could securely get the funds you need to grow your business.
    $500
    $250,000
    Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    Lending Express Business Loan Marketplace
    $5,000
    $500,000
    At least 3 months in business and $10,000+ in monthly revenue. Your business might also qualify if it's been in business at least 6 months with $3,000+ in monthly revenue.
    Excel Capital Management Small Business Loans
    Get personalized financing options that suit your unique business needs in just a few simple steps.
    Varies by loan type
    Varies by loan type
    Your business must operate in the US, be at least 1 year old and have monthly revenue of $15,000+.
    LendingTree Business Loans
    Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $50,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    National Business Capital Business Loans
    Get a large business loan to cover your financing needs, no matter what the purpose is. Startups welcome with 680+ credit score.
    $10,000
    $5,000,000
    Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.
    Seek Business Capital Funding Solutions
    Startups and newer businesses could qualify for loans and credit cards with a custom financing package.
    $5,000
    $150,000
    Personal credit of 680+, no bankruptcies in the last 4 years.
    BizLoans.io Business Loan Marketplace
    Get connected with wide range of loan amounts and multiple loan types from reputable lenders.
    $20,000
    $500,000
    Must have good credit and at least 6 months in business.

    Compare up to 4 providers

    How do I compare business equity loans?

    • Property type. Some lenders may only let you use either a residential or commercial property as security, although some may let you use either.
    • Loan to value of equity. Lenders will allow you to borrow up to a certain amount of the value of equity in your property — usually up to 80% — and this may also depend whether this is a commercial or residential property.
    • Interest rate. Business equity loans may have higher interest rates than home loans due to the higher risk the lender takes on with business loans.You should still compare your options as some lenders will be more competitive than others. You may also have a choice between variable and fixed rate options for business equity loans.
    • Loan amount and terms. The loan amount and terms you are approved for will depend on the business proposal you put forward, the financial position you are in, and the amount of security you are able to offer. Still, you will be able to check the minimum and maximum loan amount and terms offered by the lender before you apply.
    • Additional features. Some lenders may also offer additional features with business equity loans, such as a split loan option, interest-only repayments, and other features that you may want to take advantage of. Remember to check if there are any fees associated with these features.

    The good and the bad of business equity loans

    Pros

    • Discounted rates. As you are putting up part or all of your property as security, the lender is taking on less of a risk than if it was an unsecured loan, and may offer you discounted rates and fees on your loan.
    • Access. These loans give people an way to start a business, who may not have had any ways to access finance before this.
    • Varied loan amount. Some lenders offer a wide range of loan amounts, giving options for people who want to start small or large businesses.

    Cons

    • Risk. Using your residential or commercial property as security comes with inherent risks, especially with a business loan. If you default on the loan, your property may be taken by the lender to recoup their losses.

    Risks you should beware of

    As business equity loans require you to put up your own property as security, they are a risky endeavor to take on. Because of this, you may want to avoid applying for one of these loans without having an air-tight business plan.

    You may also want to avoid taking on a business equity loan if you’re not in a secure financial situation. This is because if, for any reason, you find yourself unable to make repayments on your business loan, you may find yourself losing your property and also with no income. These loans are risky, so make sure you consider the risks before you apply.
    Not sure if a business equity loan is right for you? Compare secured vs. unsecured business loans

    Frequently asked questions

    Was this content helpful to you? No  Yes

    Ask an Expert

    You are about to post a question on finder.com:

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our and .
    Go to site