Why Using a HELOC Loan for Your Business Isn’t a Good Idea
Linus Pauling said, “The way to get good ideas is to get lots of ideas and then throw the bad ones away.” If you are considering a HELOC loan for your business, you should cast that idea aside, because it is not good for your business.
Most good things start as just an idea. For example, when you began your business, it’s likely that you saw it as an idea whose time had come. To help it survive and thrive, don’t use a HELOC loan. Find out about your other options instead.
Why is a HELOC Loan a Bad Idea?
A HELOC loan is a home equity line of credit. In other words, you get an instant business loan by using your house as collateral. It isn’t a good idea to use it because if your business fails, your house is on the line. Additionally, a spouse will need to sign off on a HELOC.
In addition, a HELOC loan will typically come with a variable interest rate. This means the payments might be inconsistent and could even go up. That kind of situation can wreak havoc on your cash flow and put you in a greater financial bind.
When getting a HELOC loan from a bank, you usually have to pay a fee just to keep the line open, even if you don’t use the money. Worst of all, if your home decreases in value you could end up owing more than your home is worth.
What is the Alternative to a HELOC Loan?
Financing Solutions (www.financingsolutionsnow.com) offers a line of credit product that is easier to get and manage. Most importantly, you don’t have to put your home at risk.
A line of credit from Financing Solutions does not require a personal guarantee. The line can stay available for up to 12 months with no pressure to renew.
With this short term business funding option, you can have the money in your account the same day you apply. This is ideal to handle emergencies, uneven cash flow and for working capital.
Good Ideas for Business Growth
Okay. You have survived the difficult start-up phase and built a flourishing business. Now what? Well, it’s time to take your business to the next level. These tips can help you begin.
Diversification is one of the most popular growth strategies. You can do this by selling compatible products and services, creating a new line for your current product or even offering your expertise as a speaker in your field. This allows you to have various income streams, which can come in handy during uneven cash flow periods. For instance, if your business sells Christmas trees, you could also rent out your equipment when you are not using it or sell pine needles as mulch.
Seeking government contracts can also be a lucrative method for growth. Research shows that the American government is the biggest purchaser of goods and services in the world. The U.S. Chamber of Commerce or your state Economic Development Agency might be a good place to start. Best of all, once you get your foot in the door in this area, it gets easier with each contract bid.
The greatest idea for business growth is Financing Solutions. They have the instant business funding products you will need to make your dreams a reality.