Key Takeaways
- Figure's Q2 earnings reveal that business loan brokers are increasingly routing small business financing through personal home equity lines of credit, creating a new verification challenge for MCA funders.
- Dual-collateral deals that blend HELOC proceeds with business cash flow require bank verification software for funders to inspect both personal and commercial banking portals in a single workflow.
- Traditional MCA verification processes that only examine business bank accounts miss critical debt obligations hidden in personal HELOC drawdowns.
- Async screen recording platforms like Exact Balance let underwriters request recordings of both personal and business banking sessions without scheduling multiple live calls.
- Funders who fail to adapt their verification stack to HELOC-funded deals risk higher default rates as personal debt loads compound business repayment obligations.
Business Loan Brokers Are Routing Deals Through Home Equity, and MCA Funders Need to Catch Up
Figure CEO Michael Tannenbaum confirmed on the company's Q2 2026 earnings call what many in the alternative lending space have suspected: business loan brokers are increasingly arranging small business financing using personal home equity. "What's happening is people who have that home equity are using that to fund small business financing," Tannenbaum said, noting that Figure is now a full year into this channel.
For independent MCA funders, this isn't just a competitive threat. It's a verification problem. When a merchant walks into your pipeline with cash that originated from a HELOC drawdown, the traditional playbook of reviewing three months of business bank statements no longer tells the whole story. You're now underwriting a deal where personal debt obligations sit underneath the business cash flow, and your bank verification software for funders needs to account for both.
This article breaks down why HELOC-funded broker deals are proliferating, what they mean for your verification workflow, and how async recording tools let you inspect dual-account structures without doubling your underwriting time.
Why Brokers Are Pushing HELOC-Funded Business Deals
The Rate Arbitrage Is Too Attractive to Ignore
The math is straightforward. A merchant with $200,000 in home equity can draw on a HELOC at rates significantly below typical MCA factor rates. Brokers have realized they can arrange a HELOC drawdown for the merchant, collect their commission, and position the deal as "lower cost" financing. The merchant gets capital. The broker gets paid. And the HELOC originator, whether it's Figure or another platform, books the loan against residential collateral.
The problem emerges when that same merchant also has an active MCA, or applies for one after tapping their HELOC. Now two separate financing obligations are pulling from the same business revenue stream. The HELOC payment comes from personal funds, but those personal funds are replenished by business income. Without visibility into both accounts, an MCA funder is flying blind.
Broker Incentives Don't Align with Funder Risk
Brokers who arrange HELOC-backed business deals have no obligation to disclose parallel MCA positions to the HELOC originator, or vice versa. The broker's incentive is speed and commission volume, not portfolio risk management. This creates an information asymmetry that compounds as deal volume grows. Figure's disclosure that this channel has been active for a full year means thousands of these dual-obligation structures already exist in the market.
For MCA funders, the risk isn't theoretical. A merchant who drew $150,000 from a HELOC to cover a business shortfall and then applies for a $50,000 MCA is carrying $200,000 in obligations against a revenue base that may only support half that. Traditional business bank verification catches the $50,000 MCA obligation. It does not catch the $150,000 HELOC sitting in a personal account.
The Dual-Account Verification Challenge for MCA Funders
Why Single-Account Reviews Create Blind Spots
Most MCA verification workflows focus exclusively on the business operating account. Underwriters review deposits to validate revenue, examine withdrawals for existing obligations, and look for NSF patterns that signal cash flow stress. This approach works well when the business account is the only relevant financial picture.
HELOC-funded deals break this assumption. The merchant's personal account now contains material information: the HELOC balance, the monthly draw schedule, the interest payments pulling from personal funds. If the merchant is using business revenue to service that personal HELOC, the business account will show regular transfers to a personal account, but without seeing the destination, the underwriter can't determine whether those transfers fund living expenses or debt service on a six-figure credit line.
As we explored in our analysis of how HELOC-backed business funding workflows reshape bank verification software for funders, the verification gap isn't about technology limitations. It's about workflow design. Most funders simply don't ask to see personal accounts because their process wasn't built for dual-collateral structures.
Async Recording Solves the Scheduling Problem
Requiring a merchant to show both personal and business banking portals during a single live verification call is operationally painful. The call takes twice as long. The merchant may need to log into different banking platforms. Time zone coordination, already a bottleneck, becomes even more frustrating when you're asking someone to walk through two separate institutions.
Asynchronous screen recording eliminates this friction entirely. With a platform like Exact Balance, an underwriter creates a verification request specifying exactly what needs to be shown: business operating account for the last 90 days, plus personal account showing HELOC balance and recent transactions. The merchant receives a secure link, records their banking sessions at their convenience, and submits. The underwriter reviews both recordings back-to-back, on their own schedule, without coordinating a single call.
This matters at scale. If 20% of your incoming applications now involve HELOC-funded merchants, and each dual-account verification call takes 45 minutes instead of 20, you've just lost dozens of underwriting hours per week. Async workflows absorb this volume increase without adding headcount.
What Underwriters Should Look for in HELOC-Funded Applications
HELOC Draw Patterns That Signal Risk
When reviewing a personal account recording that includes a HELOC, underwriters should focus on three patterns. First, the timing of draws relative to business deposits. If HELOC draws consistently precede business account deposits by a few days, it suggests the merchant is using home equity as a bridge for cash flow gaps. Second, the utilization rate. A merchant who has drawn 80% or more of their available HELOC limit has minimal cushion and is likely stretched. Third, the repayment cadence. Irregular or minimum-only payments on the HELOC indicate the merchant may already be struggling to service this debt.
Cross-Referencing Business and Personal Transactions
The real power of dual-account verification comes from cross-referencing. When an underwriter can view both the business and personal banking recordings, transfers between accounts become transparent. A $5,000 monthly transfer from the business account to a personal account isn't concerning on its own. But if the personal account recording shows a $4,800 monthly HELOC payment going out two days later, the underwriter now knows that nearly all of that transfer services personal debt, not living expenses. That changes the affordability calculation fundamentally.
This cross-referencing capability is precisely why AI-powered affordability verification during async banking sessions has become essential. Pattern recognition across multiple account recordings catches what a single-account review misses.
Market Context: Fast-Growing Funders Face the Same Gap
The 2026 Inc 5000 list, recently published by deBanked, features several fast-growing MCA funders posting three-year growth rates exceeding 900%. Specialty Capital topped the fintech entries at 1,974% growth. Parafin and FundCanna followed with similarly aggressive trajectories.
Growth at this pace means deal volume is outstripping the capacity of manual verification processes. When a funder is reviewing hundreds of applications per week and a meaningful share now involve HELOC-funded merchants, the verification workflow either adapts or becomes the bottleneck. The funders on the Inc 5000 list didn't get there by scheduling 45-minute phone calls with every applicant. They got there by building scalable underwriting infrastructure, and dual-account async verification is the next piece of that infrastructure.
For Canadian MCA lenders in particular, where Figure's HELOC channel is less dominant but domestic alternatives like home equity lines through major banks are common, the same dynamic applies. A merchant in Toronto who draws on their TD HELOC to cover a seasonal inventory gap and then applies for an MCA through a Canadian funder presents the exact same dual-obligation risk. The verification workflow needs to account for it regardless of geography.
Frequently Asked Questions
How do MCA lenders verify HELOC obligations before funding?
MCA lenders verify HELOC obligations by requesting a recording or review of the merchant's personal banking portal alongside their business account. The underwriter examines the HELOC balance, draw history, and monthly payment amounts to determine how much of the merchant's personal cash flow is already committed to debt service. Async screen recording platforms make this practical by letting the merchant record both accounts at their convenience without scheduling a live call.
Why are HELOC-funded merchants considered higher risk for MCA funders?
HELOC-funded merchants carry higher risk because their business revenue must service both the MCA repayment and the personal HELOC obligation. If business revenue declines, the merchant faces competing demands on limited cash flow. Traditional MCA verification that only reviews business bank statements misses this personal debt layer entirely, leading to overestimated repayment capacity and higher default rates.
Can async bank verification handle multiple account reviews in a single request?
Yes. Platforms like Exact Balance allow underwriters to specify custom instructions for each verification request, including requirements to show multiple accounts. The merchant receives a single secure link, records their business banking portal and personal banking portal in one session or separate sessions, and submits both recordings for review. The underwriter watches each recording independently and cross-references transactions between accounts.
What bank verification software catches dual debt obligations for MCA funders?
Bank verification software for funders that supports async screen recording, custom verification instructions, and AI-guided recording workflows is best suited to catch dual obligations. The key capability is the ability to request and review recordings of multiple banking portals, both personal and business, within a single verification workflow. Activity tracking and timestamped audit trails ensure compliance documentation covers both account reviews.
Conclusion
Figure's Q2 data is a signal, not an anomaly. Business loan brokers routing deals through personal home equity is now a mature channel with a full year of momentum. For MCA funders, this means the single-account verification playbook is increasingly incomplete. Merchants arriving in your pipeline with HELOC-funded capital carry obligations that won't appear in a business bank statement review.
The funders who adapt will build dual-account verification into their standard workflow. The ones who don't will discover the gap in their default data. Async screen recording makes dual-account verification operationally feasible without doubling underwriting time or adding staff.
Visit exactbalance.ca to see how async verification handles multi-account requests and fits into your existing underwriting workflow.