In the U.S. alone, landscaping accounts for more than 500,000 businesses, more than 1 million workers and a market size of $102 billion, according to 2020 stats from market research company IBISWorld.
Not every landscaping company is TruGreen, though. As a small business, it can be challenging to get a loan to help you make your mark on the industry. Here are a few reasons you might require extra capital. Plus, discover some of the best funding options depending on your needs.
Financing Your Landscaping Business for Success
You’ve probably already got your mind on a specific business expense you need help funding, but here are some other common uses of small business loans for lawn care and landscaping companies.
Invest in Landscaping Equipment
This is one of the more common uses of a landscaping business loan. Whether you need to repair or buy a commercial lawn mower or truck, financing landscaping equipment can make it easier to get the machinery and tools you need when you need them.
If your region dips below freezing, you might even want to get snow removal equipment to continue to service customers during the winter months.
Here are a few other types of equipment you might require to grow your business:
- Utility trailer
- Storage shed
- Blowers, edgers, trimmers
- Sprayers and spreaders
- Grading, digging and cutting tools
- Safety equipment
Purchase Supplies and Inventory
Along the same lines, are you out of supplies you need to operate or sell to clients? If you need a ready stock of landscaping design and yard maintenance products, but don’t have the funds to make a bulk purchase, financing can help. Secure funding to restock the everyday products you require to run your business.
- Water features
- Landscaping stone and rocks
- Landscape fabrics
- Outdoor lighting
- Irrigation and drainage systems
Weather the Seasons
Landscaping businesses are one of the most sought-after services. But if you’re in a region that doesn’t experience warm temperatures year-round, you can encounter some dry spells. In a 4-seasons climate, the potential lull during winter and late fall can be hard on your business.
If you’re experiencing this type of inconsistency in your industry, seasonal funding can help you better manage your business through your slow season and prepare for the busier months ahead.
Hire Additional Staff
Adding extra hands to your workforce is another popular use of landscaping business funding. As a small business owner, you can’t be everywhere at once. So it’s important to hire trustworthy, hard-working staff who will represent your brand well.
But the cost to bring on extra hands can be more than your budget can handle, with landscaping and grounds workers earning an average of $15.56 an hour, according to 2019 data from the U.S. Bureau of Labor Statistics.
Discover Your Best Business Loan Options
Best Landscaping Loans and Financing Options for Your Business
When looking for a landscaping loan to fund your business endeavors, consider the following types of financing.
Landscaping Equipment Loan
If you need landscape trailer financing or other equipment funding, you have options. Use equipment financing to buy or lease the machinery you need.
Usually, the equipment will serve as collateral to secure the loan. That’s why, in some instances, you may be able to finance up to 100% of the equipment’s value.
Business Line of Credit
If you know you’ll have fluctuating financing needs, a business line of credit may be the best fit. It works similarly to a credit card: You’re approved for a certain amount, and you use the funds when you need them (or don’t).
You aren’t charged interest until you make a purchase. Typically, as you pay back your debt, your credit line is restored up to the original amount. You can spend a credit line on virtually any business need – pay bills, make repairs, cover overhead during slow months and more.
Term loan funds can be used for just about anything and can be repaid in a few months or years, depending on the specific loan terms.
These loans have regular payments, which, depending on your specific terms, could be due on a daily, weekly or monthly basis until paid in full. Use funds for operational expenses, supply or equipment purchases, business advertising, staffing costs, debt refinancing, expansion and more.
Working Capital Loan
The term working capital loan is an umbrella term for financing that is generally quick to fund and meant to be repaid quickly.
It’s designed to function as buffer financing when you need help covering short-term operational expenses, such as debt payments and payroll.
This type of funding can be easier and faster to obtain when compared to a conventional term loan.
SBA-backed financing is another option if you’re looking for small business loans for your lawn care company. These loans are touted for their competitive interest rates and repayment terms, spanning several years.
While there’s a lot of paperwork involved and the application and funding process can take some time, SBA loans can be conducive to borrowers who may have been ineligible for conventional bank loans. That’s because the U.S. Small Business Administration guarantees a portion of each loan, so there’s less risk involved for the lending partner.
Merchant Cash Advance
If you need fast access to funds and your credit score is in the low 500s, consider a merchant cash advance. This type of financing provides borrowers with an advance of funds based on their business’s expected revenue and cash flow.
Repayments are made daily or weekly, and are often fixed. Repayment often ranges between 3-18 months.