A HELOC uses your home as collateral and gives you a flexible, revolving line of credit at relatively low interest rates. But if your business fails, and you can’t repay the loan, your home is at risk. A Small Business Association, or SBA, loan, on the other hand, is backed by the federal government and it doesn't require home equity. But it takes longer to obtain, has stricter qualification requirements, and is intended specifically for business use. The right financing choice depends on your risk tolerance, equity position, and how quickly you need capital.
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