Whether your business is just barely staying afloat or it’s starting to sink, you know one thing. That you could really use some capital to help fund your business. You’ve considered your options and are tempted to sell your home to help fund your business. But is that a good idea? Here are five questions to ask yourself if you’re thinking about selling your home for business capital.
1. How much do you need?
The most obvious question is how much do you need? This is important because if you need a million dollars but your home is only worth $200,000, you’re still at a huge deficit. If you were to go this route you want to make sure it actually gets you what you need and hopefully more. The only way this is a good move is if it can keep your business afloat and doing well, without leaving you homeless.
2. How quickly do you need it?
Unlike other types of assets, a home can be tough because it’s not something you can sell quickly. The process can take months and months. It can sit on the market for a while. The housing market is beginning to cool down, which can make it tough for buyers who need capital right away. If you need cash now, selling your home is likely not the best option.
3. Have you explored all of your options?
Selling your home to fund your business isn’t something you should take lightly. First, consider if you’ve looked at all your options.
Have you applied for a small business loan? Have you tapped any home equity? Have you sold other assets that you can part with? You want to make sure you’ve given all other options a fair shot before deciding to sell your home.
4. Can you afford it?
If you’re thinking of selling your home to fund your business you might just be thinking about the profit and keeping your business going. But you still need somewhere to live. Can you afford the rent in your area for a place that you want? Can you afford to move? Moving requires a security deposit, first month’s rent and in some cases last month’s rent too. That’s a lot of cash upfront.
On top of that, you have to pay moving costs. Whether you hire professional movers or not, there are always costs. You have moving boxes, a U-haul van, etc. It all adds up.
Before making a move, seriously consider the costs related to moving and make sure you can afford it.
5. How much do you owe?
How much you owe on your mortgage can make a huge difference. If you feel mired in debt from your mortgage, selling your home and getting something more affordable may be your best bet. But if your home is paid off that’s another thing entirely. You have no mortgage and you’re trading that to rent. You want to weigh the short-term and long-term consequences of moving, given your financial situation with your mortgage.
What to do
So what if you’ve been rejected for small business financing, your HELOC isn’t enough and other options keep getting you to a dead-end. Selling your house may seem like the best option. There’s just one issue — your home isn’t market ready and investing the money to make it so would defeat the purpose of you trying to sell your home to fund your business.
You’re not without options, though. Here at Sundae we will buy your home as-is and offer you the best price, guaranteed. We’re not smarmy investors looking to turn a profit. We work at a large scale and believe in getting homeowners the best price around. To make it even better, we offer $10,000 in cash advances to help you settle into a new place.
So if your decision is to sell your house to fund your business we may be able to help. Of course, you want to consider the questions above carefully and perhaps talk with a financial professional who can help you decide what’s best for you and your business.
Have additional questions? Get in touch!