Many entrepreneurs and business owners have funded their businesses by getting a home equity line of credit (HELOC). Needless to say, the current real estate implosion has affected the ability of owners to get a HELOC. I suspect that banks are only providing HELOC's to owners who have a lot of equity in their homes as well as lots of other assets. Or in other words, they are only providing funds to those that don't need them, as it's commonly said :-) The fact that foreclosure is a problem for many individuals and has reched epic proportions is not helping matters either.
If I were a betting man (I am not!) I would estimate that getting a HELOC will be difficult for a number of years, especially in hard hit markets like Florida, California and Nevada.
During boom times it was common to see factoring and purchase order financing prospects walk away from term sheets and get a HELOC to fund their business or transaction. I don't think we will have that scenario repeating itself, a least for a little while.
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