Thinking of using a Home Equity Line of Credit ?
What you should know

Should I use my Home Equity Line of credit to buy equipment?

If you decide to use your Home Equity Line of credit to buy equipment you should be aware of the following:

1. A Home equity line of credit lowers your credit score and it shows up as additional revolving debt. In most cases it appears you are leveraged.  
2. There is virtually no end to the term of a Home equity line of credit and they are considered the same as credit card debt.
3. Home Equity Lines of credit have adjustable interest rates which can inflate payments beyond budges.
4. Interest paid over time on the Home Equity Line far exceeds that of a lease. 

The advantages however to leasing instead are as follows:

1. Leases do to show up on your personal credit as they are a new line of credit in the business name.
2. A lease has an end to the term and it is a great way to build your business credit. 
3. Leases do not have adjustable interest rates thus enabling your business to maintain a budget with fixed payments throughout the term.
4.  Interest paid over a shorter period of time offers you a significant savings, not to mention the tax benefits of a lease. 

Cost comparison on a $50,000.00 Home equity line of credit at 7.0% your principle & interest payment would be $449.41 per month (not including any rate increases).
If carried to full term your cost comparison would be.

A savings of $20,249.12 not including the tax benefits.

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