Benefits of a business owner applying for a HELOC vs a normal consumer

Business-purpose HELOCs are generally not regulated the same way as consumer-purpose mortgage credit. Many key federal consumer-protection rules do not apply or apply differently when the loan proceeds are used primarily for business needs. That’s why fintech lenders like Figure emphasize their HELOCs can be used for business purposes — the regulatory framework is lighter and underwriting is more flexible.

Consumer rules that usually don’t apply to business-purpose HELOCs

• TILA / Regulation Z consumer disclosure rules: Consumer mortgages get standardized disclosures and timing requirements; business-purpose loans are typically exempt.

• RESPA closing/fee disclosure rules: Rules about settlement procedures and escrow disclosures target consumer mortgages, not business loans.

• Ability-to-Repay (ATR) requirements: ATR and related Dodd-Frank consumer underwriting rules do not extend to bona-fide business-purpose lending.

• State consumer-protection statutes: Many fee caps and consumer remedies only apply to loans for personal/household use. States vary.

• Integrated TILA-RESPA disclosure forms (LE/CD)The Loan Estimate / Closing Disclosure regime is designed for consumer closed-end mortgages — not business HELOCs.

What still applies (important)

• Contract law governs everything: Rates, fees, default rights, liens/foreclosure rules, and collateral enforcement still fully apply.

• Some HELOC-specific protections (Reg Z §1026.40)These attach only if the loan is deemed a consumer transaction — depends on actual use and documentation.

• Licensing + fraud + usury laws: Misrepresenting business use to avoid consumer rules can be considered fraud. State limits may still apply.

Why fintech's promote this structure

• Faster underwriting (fewer mandated waiting periods)

• Less standardized paperwork

• Flexibility in use of funds — business, investment, expansions

Practical takeaways for business owners

• You give up certain consumer safeguards, including cooling-off and prescriptive disclosures.

• Review the contract carefully (prepayment terms, fees, recourse).

• State-law requirements differ, so compliance still matters.

A true business-purpose HELOC avoids many federal consumer-credit protections. That can make funding faster and more flexible for business owners, but it also shifts more responsibility onto you to understand the contract and remain compliant with state law. Mislabeling a consumer loan as business-purpose is not permitted.