Where can my LLC get a HELOC?

Question

I'm looking to get a home equuity line of credit for an investment property owned by my LLC. I just talked to two banks and they both said that they don't offer them for investment properties. Anyone know of any good sources for small business HELOCs?

Kyle Kelley · Answer

If you're still looking, I'm in the process of getting a HELOC on an investment property I own in South Jersey in an LLC through William Penn Bank, they lend in PA and NJ. The loan officer didn't care about the LLC, just said there would be additional papers to sign. TD Bank will also do HELOCs on investment property, but the LLC is a deal breaker for them.

Scott Hubbard · Answer

HELOCs are not available because they are residential loans guaranteed by individuals and what you seek is a type of commercial loan or credit line which are available to seasoned companies with proven financial track record. There are BLOC's Business Lines of Credit which will allow collateralization of residential income properties.

You might be able to get around the fact your entity owns the property by either transferring the property back into your personal name or by some personal guarantee or cross-collaterization agreement.  However, since you put the asset into an LLC, I am going assume you care about asset protection and further this discussion just a bit.

My advice to you is to seek out local banks where much of their business is derived from commercial lending.

Big Banks like Wells Fargo, BOA, Citi, US Bank, and Chase utilize lending programs aimed to service large swaths of depositors.  Commercial lending for real estate expansion is a relatively small demographic thus it flies below their radar.  The smaller more nimble banks such as state chartered or regional banks are better able to service you.

If the LLC that owns the property is part of a legitimate business, is profitable, then you stand a good chance of securing some kind of funding.

Legitimate, in this case, means that the entity is part of an overall business investment strategy whereby you have a business plan, tax returns, and the funds you seek are for further business expansion.

If, however, the LLC is a stand alone entity, is not profitable, or is not legitimate, then your probably better off putting into your personal name and securing funding that way, or still talking to local or regional banks to see if they have any loan programs available where you might be able to secure financing.

Good Luck

Mark Yuschak · Answer

I should have been more clear...I actually have a BLOC with multiple properties securing the interest.

Nonetheless, it was made possible by a local credit union.  I'm very certain no other institutional lender would have done what the local CU has.

Mark Yuschak · Answer

You're only talking to banks.  That's the problem.

I was able to get a blanket HELOC on multiple rentals through a local credit union.  Talk to the local CUs and get to know the commercial lending people.  They can likely help you out.

Camille D. · Answer

Looked and called everywhere.  Best I was told was to get a "business loan".  But those have higher rates.  THEN I CALLED ZION BANK.  They do HELOCs on homes in LLC!  Just closed on ours last Friday.  We are in California, so the Zion affiliate bank company here turned out to be California Bank and Trust.  God bless 'em.

Alex Shane · Answer

william penn bank does not have that product any more.

TD provides it. When talk to TD bank, make sure it is HELOC, not business line of credit

Cliff T. · Answer

@Kyle Kelley - did you end up closing on your HELOC through william penn bank?

Travis Wylie · Answer

@Ken Sanders Here in central PA you could use S&T Bank and Members First Federal Credit Union can offer both Lines of Credits based on equity you have on an investment property (80% LTV) as well as business lines of credit.  I'm not sure if they would reach out to your area or not.  It's certainly worth a phone call.

Mark Beekman · Answer

For those of you who have received a BLOC, does your bank report to Dun & Bradstreet? I'm wondering if a BLOC could help to build my business credit.

Jeff S. · Answer

At Wells talk to the business development officer.

A local credit union offered me a commercial credit line on an LLC. That was Onpoint Credit Union.

Where can my LLC get a HELOC?

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