It is an all too common practice that entrepreneurs put forth every possible dollar towards building their business, often at the expense of other personal finances. In this industry, it is not unusual to see small business owners taking out home equity loans in order to have funds for new machines and other equipment. But what happens in the event of an unforeseen drop in business?
If you own your own home and need to borrow money for your business, a home equity loan may be an option. As with any loan, there are risks, but home equity loans are unique in that if you default on your loan, you may lose both your home and your business.
If your company is in need of new equipment, leasing offers an alternative to personal loans. Instead of your entire house being used as collateral, it is simply the specific equipment that is being leased or financed. No one likes to think about his or her own business being in trouble, but the reality is that forces outside of our control can negatively impact our businesses. It's wise to be prepared and protect your family. Explore all the options that are right for you and your company's situation.
Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.
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