Small Business Loans for Landscaping and Lawn Care

2015-02-27

Minyang Jiang

Updated May 04, 2023

Starting and growing a landscaping and lawn care business, like any other small business venture, requires a significant amount of capital. However, the necessary funds may not always be readily accessible or sufficient for the business’s needs.

This is where financing solutions tailored for landscapers and lawn care professionals come into play. By ensuring fast access to the required capital, these funding options enable landscaping and lawn care businesses to launch and grow steadily, overcoming financial barriers.

In the past, the conventional approach to securing a small business loan involved visiting a local bank. Unfortunately, numerous business owners have faced disappointment when banks decline their loan applications due to insufficient collateral, poor credit history, or limited business records.

Thankfully, today’s landscapers have a wider range of funding options at their disposal, designed to provide the necessary financial boost to kick-start their business. These alternative financing solutions cater specifically to the unique challenges faced by landscaping and lawn care professionals, making it easier to secure the funds needed for a successful venture.

Small Business Loan Options for Lawn Care and Landscaping

Instead of relying on the bank to loan you the cash you need for your business, consider an alternative financing solution for your landscape business instead.

Business Cash Advances for Landscapers

Business cash advances provide a quick and simple way to gain access to money without having to come up with collateral or without the need for perfect credit.

How they work – This type of funding option offers you a cash advance of a certain amount, after which you agree to pay back the advance, plus a fee by allowing the lender to take a percentage of your credit card sales until the full amount has been paid back.

Who they’re best suited for – Those who are unable to qualify for loans at a traditional bank will find a business cash advance quite useful. This funding option is a great solution if you have bad credit, little or no collateral, and a short business history. This solution is also best suited for businesses that receive a large portion of payments through credit cards.

Pros – With a business cash advance, you get fast access to the cash you need, when you need it. The approval process is fast and easy, and you have no restrictions on how you choose to spend the money. People with bad credit can easily be approved, with no monthly minimum payments necessary.

Cons – Business cash advances usually come attached with higher fees compared to other funding solutions. Also, the daily deduction of credit card receipts can put a dent in your business’s cash flow.

Short-Term Landscaping Loans

Short-term loans are designed to give you access to the money necessary to meet short-term financing needs. They can be a flexible tool to help you manage your cash flow better, cover unexpected expenses, and take advantage of opportunities that might pop up.

How they work – Short-term business loans work like any other typical small business term loans. You’re given a specific amount of money upfront, then you pay it back along with the lender’s fees over a certain period of time. Short-term loan amounts are usually smaller, and the repayment period is much shorter than traditional loans. In addition, the payments are made daily, rather than monthly like other types of loans.

Who they’re best suited for – Just about any small business with some collateral can qualify for a short-term loan, as long as you’re fine with the higher rates and daily payment structure. The interest rate that you’ll be charged and how much money you can borrow will depend on your business revenues and history, as well as your credit rating.

Pros – The biggest advantage to this type of financing option is the fact that money is quickly accessed. There’s very little paperwork involved, and the debt is only on your record for a short period of time.

Cons – With these types of loans, your credit could be tied up, which could prevent you from applying for other loans if you need to. In addition, this type of loan may require collateral. If you don’t have any, it could be tougher to get approved.

Merchant Lines of Credit are a Great Option for Lawn Care

With a merchant line of credit, you can gain access to capital to draw upon whenever the need arises. Whether you need to get more working capital, purchase inventory, buy equipment, cover employee payroll, deal with seasonal cash flows, and pay off other debts, a line of credit can be the perfect solution.

How they work – A merchant line of credit is similar to credit cards. The financial institution gives you access to a certain amount of money that you can draw upon whenever you need to. No payments are made until you actually withdraw the money, and you only pay interest on the portion of the fixed amount that you have withdrawn. After you’ve paid back the amount borrowed, you can continue to use the money again in the future.

Who they’re best suited for – Businesses that have a longer history are better suited for this type of loan. It might be more of a challenge for a newer business to be approved for a merchant line of credit. The maximum amount of money available, the duration of the line of credit line, and the repayment terms will be dependent on your business’s revenues and credit rating.

Pros – You are only charged interest on the portion of the fixed amount that you actually withdraw. This can be highly attractive, as interest rates on traditional loans are charged on the entire amount loaned out. Capital is always available when you need it, and the money can be borrowed again and again after you’ve repaid it. It’s great for those with bad credit, and can even be a way to build your credit score.

Cons – Merchant lines of credit could tie up your credit, and hold you back from applying for any other loans. You might need collateral, as well as updated financial documents on each withdrawal.

Equipment Financing for Landscaping

Equipment financing can offer landscapers a quick, streamlined way to pay for the full value of equipment such as lawnmowers, vehicles, trash bins, and any other equipment your landscaping business might need.

How they work – These loans can be used to buy just about any type of equipment needed to run your lawn care business, but how much you are permitted to borrow will depend on the sort of equipment you’re purchasing, and if the equipment is new or used.

Equipment loans work quite similarly to vehicle financing, where the equipment itself serves as collateral for the loan. In this way, you most likely won’t need to put up any additional collateral to secure the loan. The majority of equipment loans are made at fixed interest rates and offer a fixed term length, therefore your payments will not fluctuate from one month to the next.

Who they’re best suited for – Just about any lawn care business can qualify for equipment financing. The amount of money that you can qualify to receive, as well as the interest rate charged, will depend on the value of the equipment and your business’s history. This is a great option if your credit rating isn’t great since the equipment acts as collateral for the loan.

Pros – You’ll have quick access to the cash needed to buy the equipment your business requires to operate efficiently. You don’t need any collateral, as the equipment collateralizes the loan. Not only is it OK to have bad credit, but this type of financing option can actually help you repair it.

Cons – The equipment you buy could be obsolete by the time you pay the loan off. You might also have to depreciate the equipment, which means you can’t deduct the full amount every year come tax time.

The Bottom Line on Loans For Lawn Care and Landscaping

If you’ve been disappointed by a rejected loan approval from the bank, there are other options available to you. At Credibly, we can show you what these funding options are so you can get your business up and running in a streamlined manner with no hiccups due to cash shortages. For all your working capital needs, contact Credibly today!