Small Business & HECM Credit Lines

Many small businesses are run and owned by seniors. Very often these small businesses are seasonal. With many seasonal businesses there are times when outside funds are needed to either cover unforeseen expenses or to buy inventory for the coming season.  Often going to the bank to secure a loan takes not only time, but paper work.  Proving to the bank or other lenders, the ability to repay in a timely manner often leads to delays or sometimes rejection.  If the business owner has sufficient equity in their home, taking out a reverse mortgage may be just the answer they were looking for.  Even before the funds are actually needed, getting the reverse mortgage and establishing the line of credit can give the borrower peace of mind.  Knowing that the funds are there when you need them, gives the owners more flexibility when planning their day to day activities.  By having the line of credit, the business owner may withdraw what funds he needs when he needs them.  The available funds that are left in the line of credit will grow in time.  At present, the rate of growth is approximately 4%.  Not only can the borrower receive the funds when they are needed, he can repay the line of credit as his cash flow increases.  The ability to receive funds and replace the funds with very little effort, can make running a business with fluctuating income much easier.

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