US Home Equity for New Small Businesses

Equity in a home was used as a source of capital to start 284,618 businesses in the US—7.3 per cent of all businesses—according to a new source of data released August 10 by the US Census Bureau.

The new data source is the Annual Survey of Entrepreneurs, which collects economic and demographic information on businesses and business ownership in all major US industries. The ASE collects data on an annual basis for three years beginning with reference year 2014.

SOURCE: NAHB Eye on Housing

US Home Equity for New Businesses

The 2014 Annual Survey of Entrepreneurs (ASE) shows that the industry average use of home equity as start-up capital in the US lands at 7.3 per cent, said data released August 10 by the US Census Bureau. Six industries use home equity at higher rates, notably Accommodation and Food Services, Other Services, Retail Trade, and Manufacturing. These industries similarly experience lower rates of profitability, are often not home-based businesses, and on average assemble US$50,000 to US$99,999 worth of funding as start-up capital. Equity in homes not only plays a significant role in providing capital to start US businesses in general, it is especially important in helping women and racial minorities in the US start new businesses.