Financing Your Home-Based Business

Home equity loans. Home equity loans are a cost-effective alternative to other types of loans because they offer some of the best interest rates available. However, you may not want

Credit cards. Cash advances from credit cards are an easy and quick way to gain access to cash. But as a long-term financing method, they can be expensive — credit card interest rates typically run much more than the 1 to 3 percent "over prime" you would likely pay on a bank loan. If you use credit cards, shop for the best interest rate. Introductory "teaser" rates often give you a bargain for up to six months. If you have the time and energy, you can roll over your debt to a new card every six months, taking advantage of a new teaser rate.

Equipment Leasing. Equipment lease financing is an option for many cash-starved businesses. Equipment leases give you access to many types of equipment — computers, copiers, fax machines, cars and trucks — without tying up your cash or credit lines. Although it doesn't bring in cash, leasing reduces the amount of cash you otherwise have to raise. Leasing generally proves more costly than buying in the long run, but if cash flow is an issue for your company, it is definitely something to consider.