In a business landscape that is so reliant on an evolving public health environment, business owners have needed to access capital quickly to pivot their operations or keep the business afloat. While the federal government launched the helpful Canada Emergency Business Account (CEBA), which gave Canadian small business owners loans of up to $40,000, this program will come to a conclusion at the end of October. Laura Jones, executive vice-president at the Canadian Federation of Independent Business also noted that, “the uncertainty around rent relief going into the fall is only exacerbating the stress of small business owners.” With consumers still exhibiting extreme caution around resuming their pre-pandemic habits and cases rising across Ontario, businesses may need to brace themselves for a second wave of COVID-19.  

When you need to access capital quickly so that your business can continue to operate, a home equity loan is a sound option. Getting a small business loan can be a long and burdensome process, especially when your business doesn’t fit within the bank’s criteria. However, a home equity loan provides an alternative option for business owners, allowing you to utilize the existing equity in your home to acquire vital capital for your business.

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A Tribecca home equity loan is a lump sum given to homeowners secured against your property to be used for any purpose. This financial tool has great flexibility and allows you to obtain funds quickly and easily. Whether you need $30,000, $100,000 or even $500,000, we provide home equity loans to help you reach your goals.

Why Business Owners Use Home Equity Loans 

Banks and traditional lenders often work within stringent guidelines, with limited flexibility. These parameters can sometimes be problematic for small business owners who are looking for capital to invest in their business or for personal use. Getting a business loan from a bank or traditional lending institution is a detailed process that requires documentation such as financial statements, business plans and financial projections to name only a few. The risk assessment can take several weeks and sometimes months to know if you are approved.  

Additionally, even if your business is sound, you may not get approved due to your personal credit score, insufficient credit history, lack of collateral, low growth, or any number of reasons. And in times of economic crisis like the present, rigid lending criteria will deem many small businesses as unworthy of additional financing to pay overhead expenses, make payroll to keep employees, temporarily halt operations because of new COVID restrictions, or bridge a short-term loss. This time consuming process is one of the reasons small business owners and entrepreneurs may opt to use the equity in their home to finance their business. 

At Tribecca, we are here to help you succeed, not micromanage your business. That is why we work with business owners to provide flexible lending solutions without burdensome restrictions. There are numerous benefits to getting a home equity loan from Tribecca Finance. We understand the challenges of running a business. We have a simple application process, minimal documentation requirements, and same day approval, giving you access to the funds you need within days. We can offer the best home equity loan rates in Ontario with flexible payment options. This means we can design a payment plan in which you make zero payments for up to 12 months. During this financially trying time, having one less demand on your finances is very helpful to business owners.

Tax benefits

Using a home equity loan to invest in your business has unique tax benefits. Small business owners are able to deduct the cost of the home equity loan if it is used to cover a business expense. While mortgage interest is not typically tax-deductible, the interest on your home equity loan may be deducted if the proceeds of the loan are used for your business.

You simply deduct the interest charges on the home equity loan from the income on your business tax return. However, it is important to consult your accountant to ensure you are following the correct tax protocols and recordkeeping procedures. 

So, when faced with the choice of pursuing a small business loan or choosing a home equity loan, it’s important you consider the needs of your business, your ability to service debt, and the urgency of your capital requirements. 

If you want to learn more about home equity loans, call us at (416) 225-6900 or contact us and a Tribecca lending specialist will be happy to answer your questionand help you find the lending solution that works best for you. 

If home equity is not the type of loan you’re looking for you can explore other options we have: Second mortgage, construction loan and personal loan.