Finding the cash you need to get your business off the ground can be a frustrating experience frustrating. Most lenders require a solid business history and business assets to approve a loan. Because of this, many new business owners often use personal savings or credit cards to fund start-up costs. But, paying credit card interest rates that can amount to 20% or more and draining your personal savings can be a real killer.

So, what do you do if you don't want to pay high interest rates rates, and you don't qualify for a traditional commercial loan? "You might be a lot better off using a home-equity mortgage to get your funding," says Jay Trien, a certified public accountant in Morristown, N.J. The good news is that there is a way entrepreneurs can tap into their home's equity while building a credit history in their company's name--a business home equity line of credit (HELOC).

The business HELOC works the same way as a traditional HELOC except that you must use the money for your business, and the payment history on this type of loan is transferred to your business's credit rating. As a result, a positive payment history on the business HELOC will result in your building sufficient credit to obtain traditional commercial financing, without including personal collateral, to fund future growth A business HELOC is set up exactly as any other equity line of credit. Business owners can easily access cash out on the line of credit, either by writing a check or electronically transferring funds up to the limit of the loan, which can really help with on-going start-up expenses, act as emergency funds and help preserve your cash flow. Business HELOCs, like other home equity loans (second mortgages), are secured by the equity in your home. The interest rate can be fixed or left as a variable rate, and some HELOCs can be interest only loans. And, the interest in a business HELOC can be tax deductible as a business expense.

The low rates and the flexibility of the fact that you only pay interest on funds you access, make a business HELOC a viable option for securing start-up capital. It is also easier to qualify for a business HELOC than for traditional commercial loans. And, unlike commercial loans, HELOCs do not include application, Small Business Administration (SBA) guarantee fees or other third-party costs, so more of your money will be available for your business. Also, if the term expires while an amount is outstanding, you may be able to extend the line rather than having to apply for a new loan.