When you own a landscaping business, you often need to pay for supplies upfront before the work begins. That’s especially true for larger projects, which can run into thousands of dollars in materials and labor costs. But if you don’t have enough cash to cover those expenses, you can struggle to get the project done. That’s why a small business loan for landscaping is a great option.
There are many types of business loans for landscapers, but you’ll need to know your industry and your funding needs to determine which type is best for you. For example, if you’re looking for long-term financing, an SBA 7(a) loan might be the right fit. This loan offers the highest maximum loan amount and lowest rates, but it can take weeks or months for a bank to process an application, and approval isn’t always guaranteed.
Alternative lenders, on the other hand, can offer fast processing times and more flexible terms. Their applications typically require a lower credit score and less time-in-business than those of a bank, and their rates are usually lower as well. You’ll also find that there are a lot of lenders that specialize in financing for landscapers, which can make it easier to secure the funding you need.
Seasonality
Landscaping businesses are more likely to experience seasonality than other small businesses. That means that your business will be busier during certain times of the year, which can affect your cash flow. A short-term business loan for landscaping can give you the working capital you need to maintain operations and grow your company during the off-season.
Supply costs
Landscapers need a lot of supplies, including sod, mulch, soil, compost, gravel, stone, and masonry. The cost of these supplies varies, and you may need to purchase them in large quantities to complete a project. But if you don’t have sufficient cash reserves to cover the expense, you can struggle to stay in operation until your clients pay you. A working capital loan for landscaping can provide the funds you need to cover day-to-day operating costs, such as invoicing, employee payroll, inventory, and equipment maintenance.
Commercial demand
The demand for landscapers from commercial clients is increasing, and that can mean higher revenue for your business. A commercial landscaping loan can give you the working capital you need to bid on and win these jobs, hire staff to handle them, and advertise your services so that you’re better positioned to compete for them.
The most common types of commercial business loans for landscaping are business lines of credit and commercial mortgages. Both options have competitive interest rates and generous repayment terms, but you’ll need to use your home as collateral. This can be a good choice for some landscaping companies, but it’s not ideal for others that are more concerned with maintaining their independence. That’s why other forms of business financing for landscaping can be a better fit, such as invoice factoring and merchant cash advances.