Practical Ways To Fund Your Gardening Business
If you have a passion for gardening, lawn care, or beautifying someone’s front yard, you can turn that passion into a small business. As one of the faster-growing businesses, the gardening industry can provide you with a potentially high income while at the same time protecting the environment.
Like other business undertakings, you will depend on money to start or grow a gardening business. The good news is, it doesn’t require a large fund to pursue this venture. However, lining up financing may be necessary so you can avoid tapping into your personal savings or accumulating balances on your personal credit cards.
Because whether you like it or not, financial challenges can always arise when you’re starting or running a business of any type and size. Hence, it’s always a good idea to equip yourself with different financing options. Below are some of the practical ways to fund your gardening business.
Merchant Cash Advance
When entrepreneurs need more funds for their business, bank loans are often the first things that come to mind. But traditional loans may take a lot of time and are harder to qualify for. One of the options you might want to consider, especially if your business needs fast cash, is a merchant cash advance.
Basically, this type of financing option is not a loan. But it’s a cash advance that you can get based on your future credit card sales. A merchant cash provider will give you a specific sum in advance that you will have to repay by a percentage of your customer’s daily or weekly payments.
Note that a merchant cash advance may come with higher interest rates. Thus, it can be challenging to manage your future cash flow if you rely on this option all the time.
Installment Loans
Another viable option for your gardening business is installment loans. Their most advantageous feature is a predictable payment schedule and fixed interest rate. Because with an installment loan, you’ll get a lump sum that you must pay back along with a set interest rate over a predetermined period. The term for this type of loan is usually one to five years.
There are many sources of installment loans, such as banks, credit unions, and alternative lenders. Every lender will calculate your monthly payment, and it may vary depending on several factors like the loan amount, applicable interest rate, and the loan term. If you want to figure out your monthly installment, ensure to include the lender’s criteria in your calculation.
It’s easier to manage your payments with an installment loan. However, make sure to borrow only what your business can comfortably afford every month.
Equipment Financing
Your gardening business most likely involves essential tools like shovel, rake, hoe, lawnmower, weed eater, and trowel. You can get the funds you need to purchase such necessary items through equipment financing. To do this, you’ll have to provide the lender with a quote for the equipment you want to purchase.
The interest rate, loan term, and the amount you can borrow depend on the type of equipment you’ll purchase and whether it is brand new or used. Typically, you won’t need to put up any personal or business assets to secure this loan, as the equipment itself serves as your collateral.
With this type of financing, you can get the equipment outright. However, the term of this loan generally lasts the life of the equipment, so make sure it is worth the investment.
Line of Credit
A business line of credit is a flexible financing option that you can utilize for your gardening business. It allows you to have consistent access to borrowed capital to keep with unexpected expenses or cash flow issues in your business operations. Like credit cards, you can access the funds whenever you want and as long as you don’t exceed your credit limit.
Most often, interest is only charged on the amount of the credit line you accessed. However, some lenders may require a maintenance fee for your credit line. It’s always a good idea to carefully read the loan terms so you won’t miss any important details like additional fees or penalties.
Invoice Financing
If your business has a stack of unpaid bills you’re waiting to collect, invoice financing can be a better option than taking out a traditional loan. Instead of adding liabilities to your business or using its future sales projections, you can use your existing invoices to acquire the funding you need.
But this type of financing works best as a short-term solution. Of course, you cannot always rely on your existing invoices to take care of your business’s funding needs. If cash shortages keep on recurring, you may have to look for a long-term remedy.
Making The Final Decision
There is no one option that is right for all your business funding needs. It depends on various factors, such as the purpose of financing, the amount you need, and your business capacity to make repayments. There are several financing options available but always take time to shop around and choose the one that will help your business thrive.
