Starting and running a small business takes careful planning, diligence, and excellent management of finances. This is especially true for a lawn care company, which is often seasonal and relies on customers who pay in cash or by check. As a result, there are often large stretches of time when the company doesn’t have consistent cash flow. In these times, it is a good idea to look into alternative financing options.
Fortunately, there are many types of small business loans for lawn care to choose from. Depending on the size and needs of your company, you may qualify for equipment financing or a working capital loan. Typically, these types of loans are easier to get than traditional bank loans and do not require you to put up collateral or have a high credit score. However, the terms and rates can vary between lenders.
One of the most important things that any new lawn care business owner needs is money to buy the necessary equipment. Whether it’s mowers, a truck to transport the equipment, or a shed to store the tools, the upfront costs can be daunting for a newly minted lawn care company. Equipment financing is a great option for businesses that need to buy costly equipment but do not have the cash on hand. Essentially, the equipment acts as collateral for the loan, and you can typically get this type of business loan even if your credit is less than stellar.
A working capital loan can be a great way to finance the growth of your landscaping business. It can help with payroll, acquiring materials, or simply getting through slow periods when work is scarce. Typically, this type of loan is easier to obtain than a traditional bank loan and offers better terms (e.g. lower interest rates and longer repayment terms).
Another common type of small business loan for lawn care is a merchant cash advance, which works by advancing you a daily percentage of your future credit and debit card sales. This type of financing can be ideal for seasonal businesses like a lawn care company, since payments will fluctuate with your business’s revenue.
Other options include venture capital, which can provide funding in exchange for a stake in your company. This is a risky way to fund your business, but it can be worth the risk if you are confident in your ability to grow and manage the company.
Finally, it’s always a good idea to look into the grants that your city or state may offer for small business owners. Typically, these are aimed at helping local businesses, including those that use eco-friendly practices or are run by refugees or immigrants. These can be a good source of financing for your lawn care company, and they are often quite easy to apply for. Make sure that you take the time to research your options and thoroughly understand what each loan or grant requires before applying.