Use An Equity Release To Start Your Small Business

Small businesses can be tricky to start. While you might be interested in getting investors, a lot of investors require a proof of concept, meaning that they will not give you any money before they know that your business ideas are going to work. So that means you’re most likely going to be on your own when it comes to acquiring the capital for a business idea unless you can find someone who is willing to give you money based solely on the quality of your business plan.

equity-release-to-start-your-small-business

So in this instance, it might be difficult to find money for your small business. After all, you’re going to need a little bit of money to invest in your business for inventory if you’re selling products or perhaps to rent or lease an office space for you and a handful of employees, should you need them.

One way to get some money for your small business, if you’re having trouble acquiring investors, is to utilise an equity release. Plenty of small business owners start their businesses using money they’ve acquired from equity releases on their homes.

How Does It Work?

Your home’s value is a line of credit, essentially. As you make payments on your mortgage, you accrue good standing with lenders, and as your property value increases, plans can pay out tax-free based on a certain amount you’re eligible for. As this money is tax-free, it’s commonly used for retirements and for starting small businesses.

Suppose you own a home that you’ve been paying off for years. You will still own the home if you release its equity and you will be able to use the assets you have for capital for your business. So for instance, if you need seed money for things like computers or a storefront, or perhaps you’d like to rent a warehouse in order to store your wares, you can use the money you get from an equity release to do this. Now, this is something you need a third party for. In order to get this kind of money, you need a plan and a professional who can assist you in releasing your equity.

Who to Contact

Because this process can get a little complicated, it’s a good idea to reach out to some professionals who can assist you with the plan itself as well as answer any questions you might have about ownership and property questions. For instance, depending on who you release your equity through, you are limited to certain things. For instance, if you release equity through a company like responsibleequityrelease.co.uk, you will not be able to sell any part of your property but you will still retain one hundred per cent ownership of your own property.

If you’re going to release equity in order to fund your business, it’s a good idea to talk to some experts. If you start doing some research on professionals and then choose one, be sure to tell him or her about your plans so that he or she can offer you advice as you enact your plans.

Add Comment