SBA 504 Loans for Landscaping Companies
Landscaping services have experienced ongoing growth and demand as the housing market has improved. Since 2013, the landscaping industry has experienced almost 6% growth each year. And, in 2018, the industry is expected to create an incredible $93 billion in revenue. All this means that it could be
Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get QuotesLandscaping Companies Grow with SBA 504 Loans
Landscaping services have experienced ongoing growth and demand as the housing market has improved. Since 2013, the landscaping industry has experienced almost 6% growth each year. And, in 2018, the industry is expected to create an incredible $93 billion in revenue. All this means that it could be a great time to expand your landscaping firm.
Despite the opportunities that the market offers, landscaping business owners face serious hurdles here, particularly when it comes to finding the capital needed to get grow. Fortunately, SBA 504 loans can help. 504 loans are designed for specific uses, including the purchase and improvement of real estate, the purchase or construction of buildings, and the purchase of fixed equipment. The costs of landscaping equipment can be immense; for instance, a single backhoe can cost tens of thousands of dollars, even in used condition.
Landscaping Entrepreneurs May Want to Look Toward Other SBA Loan Options in Order to Fund Working Capital
With an SBA 504 loan, business owners can find their dream and grow their business. However, there are restrictions; these loans cannot be used for working capital, and cannot be used in conjunction with leased equipment. Borrowers who want working capital financing may find that the SBA 7(a) loan is a better fit. Like the SBA 504 loan, the 7(a) loan is offered in amounts of up to $5 million, but it can be used for working capital and other general business uses, not just real estate, construction, and fixed equipment. Other SBA loan options include the SBA express loan and the SBA microloan, both of which may be suited for borrowers who need a smaller amount of money with less hoops to jump through.
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Related Questions
What are the eligibility requirements for an SBA 504 loan for a landscaping company?
The eligibility requirements for an SBA 504 loan for a landscaping company are as follows:
- The business must be a for-profit, operating in the United States
- The business must occupy at least 51% of the project property
- The business must have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the past two years
- The business must be able to demonstrate the ability to repay the loan
For more information, please visit SBA 504 Loans for Landscaping Companies.
What are the benefits of an SBA 504 loan for a landscaping company?
An SBA 504 loan can be a great option for landscaping companies looking to purchase or improve real estate, purchase or construct buildings, or purchase fixed equipment. Benefits of an SBA 504 loan include:
- Up to $5 million in loan amounts
- Long-term, fixed-rate financing
- Low down payment requirements
- No balloon payments
- No personal guarantees
However, SBA 504 loans cannot be used for working capital or leased equipment. For these needs, borrowers may want to look into other SBA loan options such as the SBA 7(a) loan, SBA Express loan, or SBA Microloan.
What are the steps to apply for an SBA 504 loan for a landscaping company?
The steps to apply for an SBA 504 loan for a landscaping company are as follows:
- Complete an SBA 504 loan application form 1244.
- Complete both a Statement of Personal History (form 912) and a Personal Financial Statement (form 413).
- Provide two business financial statements to support your application and demonstrate your ability to repay the loan:
- Profit and loss (P&L) statement that is 90-days current with the previous three years of supplementary schedules.
- A projected financial statement that outlines a detailed one-year income projection with a written explanation of how the projection is achievable.
- Create a list with contact information for applicable affiliates and subsidiaries with important influences and relations.
- Provide your original business certificate or license, or use your corporate seal to stamp your application if your business is a corporation.
- If you have applied for loans before, include records of those applications.
- Gather and submit business and personal federal income tax returns that have been signed in the previous three years.
- Each principal applicant needs to produce a personal resume.
- Provide a written history of challenges the business has faced, why the SBA loan is needed, and how it can help.
If the loan proceeds are being used to purchase an existing business, you will also need:
- P&L statement of the business you are buying and an up-to-date balance sheet.
- Income tax returns of the business you are purchasing dating back two years.
- Terms of sale and the proposed bill.
- A list that includes the schedule of inventory, furniture, fixtures, machinery and equipment, and the asking price.
What are the repayment terms for an SBA 504 loan for a landscaping company?
The repayment terms for an SBA 504 loan for a landscaping company depend on the loan amount and the type of collateral used. Generally, the loan term is 10 or 20 years for real estate and 10 years for equipment. The interest rate is fixed for the life of the loan and is based on the market rate for 5- and 10-year U.S. Treasury issues. The loan is typically amortized over the life of the loan, with a balloon payment due at the end of the term.
For more information, please visit SBA 504 Loans for Landscaping Companies.
What documents are required to apply for an SBA 504 loan for a landscaping company?
In order to apply for an SBA 504 loan for a landscaping company, you will need to provide the following documents:
- Business tax returns for the past three years
- Personal tax returns for the past three years
- Business financial statements for the past three years
- Personal financial statements for the past three years
- Business balance sheet
- Business income statement
- Business cash flow statement
- Business debt schedule
- Business organizational documents
- Business lease agreements
- Business licenses and permits
- Business insurance policies
- Business resumes
- Business collateral
- Business projections
For more information, please visit SBA 504 Loans for Landscaping Companies.