Small business owners turning to home equity investments for funding

In recent years, companies that provide home-equity investments have increasingly found favor on Wall Street, where investors were eager to increase their bets on the US housing market.

The main players in the space — companies like EquiFi, Hometap, Point, and Unison — are backed by household names among institutional investors, including Bain Capital, Citigroup, Prudential Financial, and Redwood Trust.

Home-equity investments are also becoming more popular among entrepreneurs who have seen their home values surge amid the pandemic.

Last year, Americans launched 4.4 million businesses, up 24% from the prior year, according to the think tank Peterson Institute for International Economics. That spike in entrepreneurship meant more capital requirements for small-business owners, some of whom turned to home-equity investments. One provider, Hometap, deployed roughly $8.5 million in home-equity investments to small-business owners in the first quarter of this year, more than triple that of the same period in 2021, according to the company.

This article originally appeared on Business Insider. Read the article here.