Biz2Credit's customer base of small business owners will be given the option to tap into anywhere from $50,000 to $500,000 in financing through Better.com's Home Equity Line of Credit and Home Equity Loan products. 

Vishal Garg, CEO of Better.com, said traditionally many small businesses have started by leveraging the small business owners' home equity but fewer financial institutions offer those products today.

"After the global financial crisis, HELOCs became much, much more difficult to get. Most of the banking system retreated from the second lien home equity product, and most have yet to re-enter," Garg told American Banker. "There's a whole generation of small business owners that don't know that rather than getting a high interest rate personal installment loan – which can have APRs of upwards of 14 to 15% – or merchant cash advance which are more like 36% – they can leverage their home equity to help fund their business, help start a business or help their business ride out a rough patch. We want to enable that to happen really seamlessly."

Current Biz2Credit customers will be offered a $250 price concession if funding a HELOC or home equity loan through the company's partnership with Better.com. Garg said in an interview that around 20% of Better.com's customer base is either self-employed or owns a small business, which made the partnership an obvious fit.

Rohit Arora, CEO and co-founder of Biz2Credit, agreed.

"Small businesses are a critical component of the U.S. economy. Business owners and aspiring founders need the flexibility to obtain capital conveniently," Arora said. "Our partnership with Better.com gives entrepreneurs a unique opportunity to obtain additional financing from Better, secured with their real estate assets. We are glad to partner with companies like Better.com that share our vision of using data and AI to make financing easier to access."

Better.com is a leading player in AI-powered mortgages and was the first fintech to fund more than $100 billion worth of mortgage value. The company's proprietary "Tinman" artificial intelligence loan origination product gives prospective borrowers rate options within seconds of applying and pre-approval within minutes.

Garg said tailored underwriting criteria has led to Better.com growing by more than 400% last year. The company operates a marketplace for people seeking home equity financing that has a range of lenders.

"If you're a small business owner with a high debt-to-income ratio because you're investing in your business, but you have a decent chunk of equity in your home, you're going to get approved, and you're going to get a rate that's cheaper than an installment loan or merchant cash advance," Garg said. "That's going to enable you to invest in your business. Our AI engine Tinman takes the customers attributes and the property's attributes and instantly matches it with the investors underwriting criteria and enables a decision in five minutes and a committed loan decision within eight hours. After that, you're fully done, and you know you have your money within the same day that you're making your application."