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Leveraging homeownership for self-employed business growth

Self-employment and small businesses play a significant role in Canada’s economy. Those who are self-employed are more than just artists and contractors; they are also self-employed business owners and service providers. Those in the latter group may find themselves in a position where it’s time to expand. When that’s the case, they’ll need financing, and one option to receive this financing is from their home equity.     

The experience of managing your home business  

In 2018, 15% of Canada’s workforce were declared self-employed. Being a self-employed business owner brings several advantages. It eliminates the commute, allows independence, and promotes flexible working hours. Even with this employment freedom, it’s important to remember that managing your business needs just as much discipline and deliberation as any other regular job

a young man watering his plants in his home

Key areas to manage in your home business 

Marketing 

Advertising your business can mean reaching out to third parties to accomplish your marketing for you or regular posting on your social media accounts. Most self-employed people start by marketing themselves, with short video content and a stable online presence being their primary strategy to gain traction in their business. As they grow, they may also expand through creating your website and investing in ads.

Networking  

Since you’ll manage most of the marketing, you may also be more present on social media. In expanding your network and your business, being active on social media and interacting with your community is essential in building your presence and meeting other like-minded entrepreneurs. You’ll gain customer perspective and learn new things from more experienced business owners.

Managing business growth

As time passes, you’ll probably find your business growing. For some, that means moving business operations to a different base so that you can hire people to spread out the work. Alternatively, it could mean renovating your space to accommodate more demands or moving to a different house altogether. 

Balancing work and personal life 

Consolidating multiple loans under one loan means that borrowers will only have one monthly payment to focus on rather than multiple. As such, the debt payments could be much lower once they consolidate their debts. Borrowers will also be able to pay off their debts faster.  

Financial planning for home businesses

While businesses can generate income for you, you will still have to invest money into your endeavour for it to continue operating or grow further. 

Tax benefits and deductions  

Self-made entrepreneurs experience tax season differently than regular salaried employees do. When you’re employed, the only task you may have to do is declare how much you earn throughout the year. However, self-employed Canadians need to be more meticulous with their financial records. Any money spent towards the business and the total earnings must be accounted for.

While there may be a more elaborate process in self-employment taxes, the benefits are just as great. As self-employed, your obligations towards the Canadian Revenue Agency might be less than salaried workers. You may even declare your internet, advertising, and rent costs because you may be eligible for certain deductions if you use your personal space. Any money you receive on your return can be used to invest in your business

Homeownership as an investment tool  

Owning your own house is an investment in more ways than one. When you’re self-employed, much of your work can be accomplished in your home. Whether you have a studio for your projects or a desk next to your bed in your bedroom, your house provides a cozy and personal space to do your work.   

Regarding financial planning and homeownership, using your place saves you money on commuting or leasing expenses. The money you save can be used to improve a room to accommodate your business needs instead. 

Home equity loans for your business  

Using your home for your business operations is one of many advantages your property gives you. Another source of financing that owners have an advantage of is access to their home equity as a lump sum.  

You can calculate your home equity by subtracting your outstanding mortgage from the appraised value of your property. With properties having high value in Canada, the loan can also be significant, making it perfect for financing some business expenses.  

Home equity loans can be found at most prominent financial institutions and alternative lenders. The difference is that banks have more demanding criteria than alternative lenders. Typically, banks require a solid credit score and steady income before getting approved for a home equity loan. Alternative lenders operate differently and focus more on the value of your home equity rather than your financial history. 

Conclusion: the use of home equity loans for your business 

Home equity loans are a great way to invest back into your business. You can hire more people, upgrade your equipment, or launch a new marketing plan through them. Not only are they an opportunity to obtain a considerable loan amount, but they also have comparably lower interest rates and more flexible criteria. One way you can get a home equity loan is through Alpine Credits, a popular choice for Canadians to get a home equity loan.

With Alpine Credits, if you own at least 25% of your mortgage, you are eligible for a home equity loan worth up to 75% of your home value. They do not have to examine your financial background to determine your approval; they only need to see your home equity. You can contact a member of the Financial Solutions Specialist team, and they can guide you through the application process while answering any questions you may have.  

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Frequently asked questions

When you start your journey as an entrepreneur, you will set goals for your business growth. Even if you plan to stay a small or medium-sized business, you’ll need to achieve some growth through profitability, operation expansions, customer base, and other key growth areas.

Being self-employed and operating a business at home has several advantages. The main ones are that you can multitask work errands and house errands, receive tax advantages, and commute less.

The way you determine growth depends on each business owner. For some, growth means generating more earnings, while another sees it as increasing the number of employees. Regardless, getting to your desired results means using specific strategies such as getting to know your customer base.