Home Equity Loans

By Entrepreneur Staff

Home Equity Loans Definition:

A loan that allows homeowners to borrow against the equity in their homes

If you're looking for startup or expansion capital for your business and you own a home, consider getting a home equity loan on the part of the mortgage that you've already paid off. The bank will either provide a lump-sum loan payment or extend a line of credit based on the equity in your home. Home-equity loans carry relatively low interest rates, and all interest paid on a loan of up to $100,000 is tax-deductible. But be sure you can repay the loan--you can lose your home if you don't repay.

More From Expansion Financing

Factoring

A financing method in which a business owner sells accounts receivable at a discount to a third-party funding source to raise capital

Angel Investor

An individual who invests his or her own money in an entrepreneurial company

Friends/Family Financing

Monies, usually in the form a loan, that a business owner gets from either family members or friends in order to help finance their startup or growing business

Government Grants

An award of financial assistance in the form of money by the federal government to an eligible grantee with no expectation that the funds will be paid back. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, interest subsidies, insurance, or direct appropriations