Getting a small business loan for landscaping can enable a company to purchase supplies, hire additional workers, expand operations, and cover other expenses that help a lawn care or landscapers firm grow and thrive. However, financing options can vary and can be complicated to understand. There are many things to consider, including whether a lawn care or landscaping company is seasonal, which can impact how much a business can borrow and how long it has to repay the financing.
There are several types of financing for landscaping businesses, including business lines of credit, working capital loans, and equipment financing. Nav’s Industry Funding guides make it easy for you to compare your financing options and choose the right one for your business.
General working capital financing: This type of funding is usually the most common way for a landscaping business to secure financing. It’s typically quick to obtain, but the repayment terms are often a bit longer than those of other types of financing. Working capital loans are available from banks, conventional lenders, and alternative lenders. Some may have strict requirements, including requiring collateral and having a high credit score or time-in-business. Others, such as invoice financing, may be easier for a seasonal or startup company to qualify for and have more flexible terms.
Equipment financing: Financing for landscaping companies can be especially helpful for those who need to buy new or used equipment. This can include everything from small tools like shears to larger equipment such as a commercial mower or a truck. Some types of equipment also require insurance, which can be expensive. Depending on your region, you might need snow removal equipment to continue servicing customers even as the weather turns cold. Purchasing new or used equipment, obtaining necessary insurance, and covering other costs can add up to a significant expense that may not be possible to cover with cash on hand.
Landscaping supplies: Buying the materials your landscaping or lawn care business needs can be very costly, especially if you’re buying them in bulk for a specific project. These supplies can include sod, mulch, soil, compost, gravel, stone, and masonry. Depending on how large the project is, you could need enough supplies to last you months or even years. Financing for landscaping companies can be helpful if you don’t have the funds to pay for the necessary materials up front or if your customers won’t be paying on time.
A lawn care or landscaping business might also look into personal loans or home equity loans. These can be secured with your own property as collateral and can have lower interest rates than traditional financing. But these can also be difficult to obtain if you have bad credit or are just starting up your business.