Using HELOC w/ free appraisal to help secure SBA loan

[Ben Ertl]

Hi all,

My wife and I are looking to get a commercial loan for a motel purchase.  The thought crossed my mind that our personal residence (upper and lower duplex) that we bought for $87k and put over $20k into could be leveraged to help secure an SBA loan for the motel purchase (about $300k).

If I were to open a HELOC on our personal home, that would allow me to get a free appraisal through the bank that's doing the HELOC. If that appraisal comes back at $120,000 (just an estimate) would that allow the commercial lender to view our home as having more equity? Or would the HELOC in place negate any equity in the home we could potential use as collateral for an SBA loan?

The idea is that we wouldn't use the HELOC. It's really just a means to get a free appraisal.