Smaill Business Loans

SMALL BUSINESS LOANS are more and more common in America as individuals continue to look for ways to supplement their income or work for themselves.

Financing a small business loans has never been easy, but with the creation of the home equity loans many have been able to get the cash needed launch their business.

There are many advantages to a home equity loan. First of all, they are easier to obtain than venture capital money and traditional commercial loans. Furthermore, the interest payments are tax deductible.

The concern faced when considering a home equity loan is that you are using your home as collateral for your loan. Most business startups facing this risk decide to finance only a portion of their startup costs via a home equity loan, leaving the rest of the business debt in traditional loans that if defaulted upon would not cost you your home. Besides the tax deduction of interest payments, home equity loans are also appealing because they can be obtained at lower rates than you would get for a traditional loan. Rates have been as low as 3.75% from major lenders.

If you have equity in your home, equity loans are typically easy to obtain and can be very helpful for paying for unexpected expenses that arise when you startup your business. Loans taken in addition to startup capital raised are often called business administration loans. These small business loans serve the purpose of getting cash quickly for operations, not for initial startup costs which are typically much larger.


Common Small Business Loans Questions:


1. Why should I be interested in a home equity loan for my small business ?

Home equity loans have tax deductible interest payments, they are easier to obtain and they have lower interest rates. If risk of home foreclosure is a concern, home equity loans can be taken out to cover only a portion of the small business startup costs removing a considerable amount of risk.

2. What is a small business administration loan?

A small business administration loan is a loan taken out to cover operating expenses so that a business can remain in operation while it has revenues sitting in accounts receivable.

3. How much money can I get from a home equity loan?

The size of the small business loan you can obtain from your home equity will depend on how much of your mortgage balance remains. Generally, you can borrow up to 125% of the equity in your home. Most lenders advice only borrowing as much money as you have equity in your home to avoid risk. This is why home equity loans are generally used to supplement startup capital obtained through venture capitalists or traditional loans.