Starting or growing a business takes more than just a great idea. It takes capital! And while “small business loan” is often the first thing you’ll search, it’s important to know that it’s not a single type of loan. A small business loan could be any number of products from a wide range of financing options.
And if you’re a homeowner with significant equity, you may have another option worth considering: an equity sharing home loan. This alternative taps into the value you’ve built up in your home, offering a different path to business funding.
Equity Sharing Home Loan vs. Small Business Loan
Here’s how these options stack up – and which might make more sense for your financial situation and goals.
What Is a Small Business Loan, Really?
“Small business loan” is an umbrella term that covers a wide range of funding types. These loans vary in size, structure, repayment terms, and eligibility requirements. Some are backed by the government, while others come from private lenders, banks, or online platforms.
Common Small Business Loan Types:
SBA Loans – Government-backed, low-interest loans ideal for established businesses.
Term Loans – Traditional lump-sum financing with predictable monthly payments.
Lines of Credit – Flexible, revolving credit for ongoing expenses or cash flow gaps.
Equipment Financing – Loans for business-critical tools and machinery.
Invoice Financing – Cash advances based on unpaid customer invoices.
Merchant Cash Advances – Quick funding with high fees, repaid from future sales.
Microloans – Smaller loans, often from nonprofits, ideal for startups or underrepresented founders.
When a Small Business Loan Makes Sense:
You’ve been in business for a while and have strong financials.
You qualify for lower rates due to good credit and business history.
You’re comfortable with monthly repayments and want to build credit.
Equity Sharing: A Different Way to Fund Your Business
If you own a home and have built up significant equity, you may be able to access funding in a less traditional way — by using your home’s value.
An equity sharing home loan, such as those offered by Unison, allows you to borrow against your home with monthly payments that are typically much lower than traditional options. Instead of taking on the full burden of a conventional loan, you agree to share a portion of your home’s future appreciation in return for access to cash today.
Why Consider an Equity Sharing Loan for Business?
Lower Monthly Payments – Compared to traditional loans, monthly payments are often significantly reduced, freeing up more cash for your business.
Not Tied to Business Revenue – Approval is based on your home equity, not your business income or time in business.
Flexible Use of Funds – Ideal for early-stage or growth-focused businesses where flexibility matters.
Preserves Cash Flow – Less financial strain during critical stages of building your business.
This approach can be particularly helpful for:
New or early-stage business owners who may not qualify for traditional loans.
Homeowners who are cash-flow cautious but equity-rich.
Entrepreneurs who want to minimize personal financial strain while building a business.
Which Option Is Right for You?
Choosing between a small business loan and an equity sharing home loan depends on your unique financial position, business goals, and risk tolerance.
Final Thoughts
Small business loans have helped millions of entrepreneurs bring their vision to life. But they’re not the only path forward. If you’re a homeowner with strong equity and want to fund your next business move without adding new debt or monthly payments, an equity sharing home loan may offer a smart, flexible alternative.
As always, it’s wise to consult with a financial advisor or lending specialist to weigh your options carefully. But don’t overlook the value you already have in your home — it might be the key to unlocking your next business opportunity.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial, legal, or lending advice. Loan terms and availability vary by lender and state. Consult a qualified financial professional or lender for personalized guidance tailored to your situation.
Unison Mortgage Corp NMLS ID 2574289
About the Author
Unison
We're the pioneers of equity sharing, offering innovative ways for you to gain access to the equity in your home. For more than a decade, we have helped over 12,000 homeowners to pursue their financial goals, from home renovations to debt consolidation, retirement savings, and more.
