Using a home quity loan for a business is fine if you can be certain that you can afford the loan payments if your business goes bust. Or if you know you will be ok if you need to sell the home. If you have a family, then of course the risk is much greater. If you are on your own then decide if you can start over should it come to that.

You can also try applying for a micro loan through the SBA. They will require collateral (your home). One difference between a micro loan and a home equity loan is the repayment schedule. A micro loan intermediary can work with you by customizing the terms in your favor.

You will also need a complete business plan. See below for more info on how to write your own business plan:
http://smallbusinessstartup.biz/plan/