Home Equity Funded My Business -- Now What?

2. SBA loans: The Small Business Administration does not make loans, but it does have a great loan guarantee program. And because these loans -- made by regular banks -- are guaranteed by an agency of the federal government, they are easier to get than conventional business loans -- and the rates are usually better, too.

There are all sorts of loans available:

• Microloans: For small loans up to $35,000.
• The 7(a) Loan: This bread-and-butter SBA loan is available for up to $2 million.
• The 504 Loan: Can be used for equipment, modernization or to acquire business real estate.

3. The friends and family plan: Most small businesses are still started with help from friends and/or family. The guys who invented Trivial Pursuit started out by giving friends and family shares of the company for investments of $1,000; not a bad deal in retrospect.

The good news with a friendly loan is that you will probably get excellent terms. The bad news: If you default, there will be hell to pay.

4. Partners: Business people bring in partners, silent or otherwise, for a variety of reasons. For instance, I am starting a huge new project that is a bit of a stretch, so we are teaming up with another company that has more experience in this realm. Similarly, bringing in a partner who is flush is not a dumb idea at all.

5. You: Do you have an IRA you can raid? What about a whole-life life insurance policy? No, these are not the best solutions, but who said entrepreneurs were reasonable?