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Using a Reverse Mortgage Loan to Save Your Small Business from Going Bust


The past year and a half have not been generous to small businesses across the U.S. with enforced COVID-19 pandemic lockdowns keeping everyone from going to bars, restaurants, gyms, nail salons, beauty parlors, and other small businesses. Add to that last summer’s violent riots in the major cities where many family businesses were looted, some owners physically assaulted, and in many cases, no arrests being made. It was, in a word, a low point for small business owners.

But even if the pandemic and 2020’s summer of unrest never happened, it’s not unusual for all small businesses to experience ups and downs. Says a recent report on small businesses, at times business will be so good, you can’t keep up with the demand. But then there will be times when things are so slow, it’s like “the market is stuck in the mud.” While no customers are coming through your doors, be they brick and mortar doors or online doors, your expenses keep accumulating.

So, what can you, a small business CEO, do about it? You can’t go to a bank. Banks are very hesitant to finance any small business these days even if you have been operational for years. But according to, a financial secret weapon exists that could help save your small business from going under. It’s called a reverse mortgage. If you happen to be just 62 years old, and still see yourself working for a long time at the small business you built from the ground up, a reverse mortgage can provide you with the cash to keep it all going.  

What’s a Reverse Mortgage?

A reverse mortgage allows you to tap into the equity you’ve built up in the home you’ve owned for many years. Unlike a traditional loan, you don’t need to make monthly payments with a reverse mortgage. All you need to pay for are utilities, maintenance, taxes, and insurance. The best part about it, is you’ll never have to make another mortgage payment again, and you can stay in your house until you decide to sell or you die. You might be surprised at how much money you qualify for. To get an idea of exactly how much, you can calculate your payout by using this handy reverse mortgage calculator.

Depending on the type of reverse mortgage you qualify for, you can use the proceeds to pay off past due bills, health care expenses, and yes, additional financing for your small business. Reverse mortgages are backed by low-interest rates which makes them especially attractive.  

Leveraging Your Most Valuable Asset

A reverse mortgage might not be for everyone, especially if you haven’t reached 62 years of age yet. But if you are of age, have sufficient equity in your home, and have no intention of moving, this might be the most inexpensive method for getting at some much-needed cash quickly. It’s also fairly hassle-free.

With interest rates so low, financial advisors are said to be embracing reverse mortgages more than ever. Maybe your home is your largest asset, but you can safely leverage it to benefit your small business without going into significant debt and/or using credit cards.

You can think of a reverse mortgage like a traditional mortgage. Interest is accrued on any unpaid balances. You can expect to pay closing costs, origination fees, third-party fees, appraisal fees, and more. But the proceeds you will receive from your reverse mortgage will make these costs seem paltry in comparison.

The Most Popular Reverse Mortgage Loan

Said to be the most sought-after reverse mortgage on the market, the Home Equity Conversion Mortgage is backed by the Federal Housing Administration. If you’re a small business owner, a HECM will appeal to you since lots of lenders offer the option.

This means you can shop around for the best rates and closing costs. The max lending rate of $625,000-plus isn’t chicken feed either. It can provide your business with the financial cushion it needs “to get you through the cash crunch.” 

Reverse Mortgage Small Business Funding

It’s a sad fact that banks rarely, if ever, offer loans to small businesses anymore. While other options exist, like a high interest rate line of credit for instance, they will cost you more in both the short and long run when compared to a reverse mortgage. Of course, a reverse mortgage is said to be a rather unconventional method for procuring much needed cash. But it could be the very thing your small business needs to survive in a volatile financial market.


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