How should Henry classify the $50,000 home-equity loan used for purchasing business equipment?

The most appropriate classification for the $50,000 home-equity loan used for purchasing business equipment is a small business loan. This classification is correct because a home-equity loan is often leveraged to fund business operations or purchases, such as equipment necessary for running a business. When homeowners use the equity they have accrued in their property to secure a loan, they essentially create a financial resource that can be utilized for business expenditures.

In this context, the nature of the loan—originating from the equity in the individual's home—means it serves the function of financing business equipment, thus qualifying it as a small business loan. This classification helps in accurately determining the purpose and nature of the loan for both accounting and financial reporting purposes. It also allows for differentiation from personal loans or credit types that do not directly facilitate business operations.

While the other options may describe aspects of a loan in general, they do not encapsulate the specific use of the home-equity loan for business equipment as effectively as classifying it as a small business loan does. Small business loans are typically associated with financing for operations or acquisitions within a business framework, making this classification the most accurate choice in this scenario.