One of the most common means for attaining funds for use in operating a small business is through a home equity loan. If you have been paying your mortgage for a few years, you have probably built up some sizable equity in your property. Banks loans taken against a person's primary residence are low-risk no matter what the funds are going to be used for. You can take the proceeds garnered from a home equity loan and use them to operate your business. Then, technically, you are financing your business, not the bank. If you use the proceeds from a personal loan to finance your business you do, however, need to make this clear on your loan application. If you lie on a loan application you have committed fraud a serious criminal offense.
* Source Streetwise Small Business Start-Up