Equity Lines of Credit & Equity Loan Principles
Equity lines of credit & equity loans both use the equity in your business – that is, the difference between your business’s value and your mortgage balance – as collateral.
One of the biggest perks of home ownership is the ability to build equity over time. You can use that equity to secure low-cost funds in the form of a “second mortgage” – either a one-time loan or a Equity lines of credit & equity loans. There are advantages and disadvantages to each of these forms of credit, so it’s important to understand the pros and cons of each before proceeding.
Because the loans are secured against the value of your company, equity loans offer extremely competitive interest rates – usually close to those of first mortgages. Compared to unsecured borrowing sources, like credit line, you’ll be paying far less in financing fees for the same loan amount.
But there’s a downside to using your company as collateral. Equity lenders place a second lien on your company, giving them the right to eventually take over your business if you fail to make payments. The more you borrow against your company or condo, the more you’re putting yourself at risk. This is why you need Funny SA financial firm services to issue financial instrument and take the risks of losing your condo or company by giving you a financial backing from a tip rated bank to help secure a loan and attract investors in doing business with you.