Protect Your Business with a HELOC

Housing prices are dropping steadily as interest rates are rising. Those who enjoyed the luxury and convenience of tapping into the rising value of their real estate holdings are suddenly feeling less wealthy. Americans relied on home equity lines of credit (HELOC) and home improvement loans during the past decade to fund everything from college tuition and new cars to vacations and weddings. Before that sweet source of funds slips into the annals of history, there's still time to take out a home equity loan and lock in a good rate.

Businessman's guide to HELOCs

If you own a business and tap into your home's equity now, you may get a reasonable home equity loan rate to help sustain you through leaner times to come. The government is already cracking down on lenders, demanding that they scrutinize loans more carefully to avoid the risk of defaults and foreclosures. As a tighter lending climate continues, it will be more difficult to quality for a HELOC or a small business commercial loan. By acting now, however, those business owners who borrow at today's rates may gain a strategic advantage over their competitors. They certainly will have a reliable source of cash set aside for a rainy day at an acceptably low rate.

The rate's the thing!

Choose fixed-rate home equity loans and home improvement loans if you want to snag a home equity loan rate that won't rise abruptly. Interest on most fixed-rate loans is still in the single digits, and economists predict that in the next year or two, that may not be the case.

It's a good idea to have money in the bank, especially if you have a small business and are heading into the first quarter of the year-a season complicated by reduced consumer spending. If you apply now, you can secure your home equity loan as a present to yourself for the holidays. You'll establish a reserve fund to make the 2007 New Year even more prosperous.