Have a business idea you can’t stop thinking about? Whether it's launching an online store, starting a home-based service, or turning a passion project into profit, your side hustle deserves a strong financial foundation. One way to fund your launch—without draining your savings or maxing out credit cards—is by using a Home Equity Line of Credit (HELOC).
If you’re a homeowner, your property’s equity can help bring your business idea to life. Here's how.
Why Use a HELOC for Your Side Hustle?
A HELOC lets you borrow against the equity in your home, giving you flexible access to funds as needed. Unlike a traditional loan, you don’t get a lump sum, you borrow only what you use, and you can draw from it multiple times during the draw period.
Benefits for side hustlers:
- Lower interest rates than personal loans or credit cards, in most cases
- Flexible access to only draw what you need as you need it, so you aren’t paying interest on the full approved amount
- Interest-only payments during the draw period (in many cases)
- No need to tap into savings or retirement funds
Ways to Use HELOC Funds for Your Business
Every side hustle is different, but many require upfront investment to get started. Here are common ways people use HELOC funds:
- Purchasing inventory or supplies
- Building a website or launching marketing efforts
- Renting equipment or workspace
- Covering startup legal and business setup costs
- Creating a financial cushion during early growth stages
Because you only pay interest on the funds you use, it’s a smart option if your business requires flexibility in spending.
HELOC vs. Business Loan: What’s the Difference?
While small business loans may seem like an obvious choice, they often come with higher qualification standards and fixed repayment terms. A HELOC can be more accessible for homeowners and gives you more control over how and when you spend.
|
Feature |
HELOC |
Small Business Loan |
|
Funding Type |
Revolving line of credit |
Lump sum |
|
Collateral |
Home equity |
May require business collateral |
|
Use Flexibility |
High |
Often limited or restrictive |
|
Qualification |
Based on home equity |
Based on business history or credit |
Important Considerations Before You Borrow
Before you tap into your home’s equity, ask yourself:
- Is my side hustle scalable or income-generating?
- Can I comfortably repay what I borrow?
- Do I have a plan if the business takes time to become profitable?
Like any loan, a HELOC comes with responsibility. Make sure you treat your borrowed funds like an investment, not a fallback.
Make Your Side Hustle Happen, Without Dipping Into Savings
Ready to turn your passion into a business? A HELOC from Heritage Bank offers flexibility, competitive rates, and trusted support you need to take the first step.
Download our free Start Up Checklist to organize your next move, from business planning to budgeting. Then, let your home equity help fund your momentum.
