Business Purpose 2nd Trust Deeds
Self-employed professionals, business owners, and entrepreneurs often face challenges accessing capital from traditional banks. Business purpose 2nd trust deeds let business owners tap home equity for working capital, equipment, and expansion — without disrupting their first mortgage or personal finances.
What Is a Business Purpose 2nd Trust Deed?
A business purpose 2nd trust deed is a junior lien loan where the funds are deployed for business needs rather than personal use. The loan is still secured by your residential property, but the proceeds fund the business.
What You Can Fund
Working Capital
Cover payroll, subcontractors, and materials during slow periods or before project payments arrive.
Equipment & Inventory
Purchase machinery, technology, or inventory to capitalize on seasonal demand and scale operations.
Expansion
Fund new locations, hiring, marketing campaigns, business acquisitions, or partnership buy-ins.
Built for the Self-Employed
Equity Over Tax Returns
Banks demand 2–3 years of business tax returns, P&Ls, and balance sheets. We focus on your home equity and property value — a more stable lending criterion for business owners at any stage.
No Restrictive Covenants
Bank business loans come with debt limits, financial reporting requirements, and use-of-funds restrictions. A 2nd trust deed has one requirement: sufficient equity.
7–10 Day Funding
Banks need 30–45 days for business loans. We fund in 7–10 days when you need capital to move on an opportunity.
Keep Your First Mortgage
A cash-out refinance disrupts your favorable first mortgage rate. A 2nd trust deed leaves it intact while unlocking equity.
Business Owners We Serve
Contractors
Working capital for materials, subcontractors, and payroll before project completion and payment.
Consultants & Services
Office setup, technology, marketing, and expansion before profitability scales.
E-commerce & Retail
Inventory financing and working capital to scale operations and meet seasonal demand.
Real Estate Investors
Acquisition capital, holding costs, and operational needs across San Diego properties.
Franchise Owners
Fund franchise expansion, new locations, or buildout costs without bank red tape.
Medical & Dental
Equipment, renovation, hiring, and practice expansion for self-employed practitioners.
What to Expect
The Process
Property Evaluation
We assess your home’s value and available equity. No formal appraisal required.
Qualification
Provide personal credit history, bank statements, and a brief description of how funds will be deployed.
Underwriting
Erik reviews your equity, credit, and repayment ability. One decision-maker, no committee.
Title Search
A title search confirms property ownership and that there are no liens or issues.
Closing
Once approved, you close on the loan. The 2nd trust deed is recorded against your property.
Funding
Funds wired to your account within 1–3 business days after closing. Deploy them into your business.
What You Need to Qualify
How San Diego Business Owners Use 2nd TDs
Contractor Working Capital
San Diego construction contractor with an $800K home and $400K first mortgage needs $100K to cover subcontractor and material costs across active jobs. With 50% equity and 710 credit, qualifies at 11%, interest-only, 5-year term.
Monthly payment: ~$917. The win: Completes more jobs in parallel and scales the operation without waiting on slow client payments.
E-commerce Inventory
E-commerce seller with a $500K home and $350K mortgage needs $80K for Q4 inventory. With 30% equity and 680 credit, qualifies at 11.5%, interest-only, 5-year term.
Monthly payment: ~$767. The win: Capitalizes on seasonal demand and turns inventory at margins that cover loan costs many times over.
Consulting Practice Expansion
Self-employed consultant with a $600K home and $250K mortgage needs $120K for office expansion and hiring. With 40% equity and 720 credit, qualifies at 11%, interest-only, 5-year term.
Monthly payment: ~$1,100. The win: Accelerates growth trajectory and adds revenue capacity without diluting business equity.
How It Compares
| Feature | Business 2nd TD | Bank Business Loan | Credit Card / Personal Loan |
|---|---|---|---|
| Time to Fund | 7–10 days | 30–45 days | 1–7 days |
| Interest Rate | 7% – 12% | 7% – 10% | 15% – 29% |
| Business Tax Returns | Optional | Required (2–3 years) | Not required |
| Use-of-Funds Restrictions | None | Strict | None |
| Loan Amount | $100K – $500K | Varies | Often capped < $50K |
| Collateral | Home equity | Business assets / personal guarantee | Unsecured |
Before You Borrow
Your Home Is Collateral
Unlike unsecured business credit, a 2nd trust deed is secured by your home. Confirm your business generates enough cash flow to cover payments.
Personal Liability
You’re personally on the hook if business returns don’t materialize. Be conservative about projected returns.
Interest Costs Add Up
Rates of 7–12% over 5–10 years are substantial. Ensure your business ROI on the capital comfortably exceeds the cost.
Reduced Equity
A 2nd TD increases combined LTV and reduces equity available for future refinancing or capital needs.
FAQ
No. We focus on personal credit, home equity, and a brief description of the business purpose. Business tax returns and P&Ls are optional but can strengthen the application.
Yes — working capital, equipment, inventory, payroll, marketing, expansion, acquisitions. You describe the purpose at application; once funded, you deploy as needed.
The stated purpose and documentation. Pricing is typically identical at EZ Loans. The key is honesty about how funds will be used — misrepresenting purpose creates compliance issues.
7–10 business days from application to closing. Funds wire to your account within 1–3 business days after closing.
No. Your existing first mortgage stays exactly as it is. A 2nd trust deed sits behind it as a junior lien, preserving your favorable first mortgage rate.
Have Questions About Your Situation?
A 15-minute conversation can clarify whether a 2nd trust deed is the right tool for your goals.
Talk to Erik