# Can an SBA loan refinance a home equity line used for business?

**Short answer:** Yes. A HELOC is eligible if the applicant certifies the amount was used exclusively for the business (SOP 50 10 8.1, App. 14, Para. A.1.i). It skips the payment test. The new loan must generally carry the same collateral and lien priority, which can mean your home.

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Last checked: 2026-11-08

In this answer, HELOC means home equity line of credit.

Yes. Appendix 14, Paragraph A.1.i of SOP 50 10 8.1 allows refinancing a Home Equity Line of Credit. It is eligible if the applicant certifies the amount was used exclusively for the business. If that certification later proves invalid, SBA will not use it to deny or repair the lender's guaranty purchase request.

## Only the business part

The certification covers only "the amount being refinanced," so any personal part stays with you.

## The payment test

A HELOC used for business purposes is excepted from the payment improvement test (App. 14, Para. A). It must still be current for at least the last 12 months or the life of the loan, whichever is less.

## Collateral can follow the debt

When proceeds refinance existing debt, the loan must carry at least the same collateral and lien priority (App. 19, Para. A). Trading assets are excepted, and a program rule can say otherwise. A HELOC is secured by your home, so the SBA loan may need a lien on it.

There are two openings. Substitute collateral may be accepted if it has comparable value and useful life and is acceptable to SBA or a Preferred Lender Program (PLP) lender. If the old debt is over-collateralized under SBA's rules and the SBA loan will remain fully secured, the lender may release the excess. Ask the lender before you assume your home comes off the table.

## Sources

- [SOP 50 10 8.1, App. 14, Para. A, General Requirements, Para. A.1.i and Ten Percent Improvement to Installment Payment Amount (p. 355)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 19, Para. A, General Requirements, Refinance transactions (p. 404)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)