Figure: Business Loan Brokers Increasingly Arranging Deals Using Home Equity

Retailers and service providers should note a shifting trend in how small business owners are funding their operations and large inventory purchases. Figure, a major fintech lender, reports that a significant portion of their loan volume is now coming from business owners using Home Equity Lines of Credit (HELOCs) rather than traditional commercial loans. This shift is driven by the speed of digital closing and lower interest rates compared to unsecured business credit. For merchants, this means your customers who are small business owners may have more liquidity than traditional credit checks suggest. If you sell high-ticket items or B2B services, understanding that your clients are tapping into residential equity can help you tailor your financing conversations. These owners are looking for capital that doesn't carry the high rates of merchant cash advances or standard business credit cards. As home equity remains high, expect more 'solopreneurs' and small shop owners to use their personal real estate as a piggy bank for business growth. This provides a more stable, lower-cost funding source that can facilitate larger transactions at your business. It also signals that the barrier between personal and professional credit is blurring further in the current economic climate.

Source: deBanked

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