How to Fund Your Established Cleaning Business When the Bank Says “No”

by Mike H. Marketeer

Starting your own cleaning service is tricky enough as it is, but ensuring that it stays afloat for several years is a whole other ball game. It doesn’t matter if you’ve been in the industry for a year or a decade. Sooner or later, you’ll realize that a professional cleaning company requires a lot of money to keep operating.

After all, a cleaning business has several things to consider. If you want your cleaning company to stay at the top of its game, you’re going to need professional cleaning supplies and consumables. These include cleaning solutions, disinfectants, polishes, detergents, chemicals, and other similar items.

 

Next, you’ll also need to maintain a steady supply of the latest and most effective non-consumable cleaning equipment such as vacuums, mops, brooms, and other machines. The cost of replacing these tools alone can drive your company to the verge of bankruptcy. And then, of course, you have to manage the costs of your transportation and employee training.

So, what happens when a bank refuses your loan application? You’re going to find yourself in a financial crunch that can cost you your company!

Here are a few ways to fund your established cleaning business when the bank says no.

Use Your Personal Savings

It’s true that your personal savings are meant for, well, personal use. However, if you urgently require funding for your cleaning business and don’t have a business savings account to fall back on, this option is worth exploring.

If you’re a sole proprietor, using personal savings for your cleaning company isn’t going to be complicated. You can “borrow” the money from your savings account and invest it wisely to help your business bounce back from the financial glitch you’ve found yourself in. If your company comprises multiple shareholders or partners, it’s best to have a written agreement drafted before anyone invests their personal savings.

Having said that, you must also actively work on a business strategy that would allow you to repay the amount borrowed from a personal savings account as soon as possible. While it’s okay to temporarily use your own money when your business funds are low, don’t let this become a common occurrence. Think through your financial game plan and make arrangements accordingly to avoid using your personal savings for your business funds in the future.

Partner with Friends or Family Members

Another way to continue financing your cleaning company when things are looking bleak is by partnering with your friends or family members. You may offer them a share in your company in exchange for their funding and work out the details between yourselves.

Before you make any hasty decisions, sit down with your loved ones and have an honest conversation with them. Be very clear about the type of partnership you’re agreeing to, including details such as the control or influence they would have as a new stakeholder. You should partner with somebody you can trust, respect, and work with so that your personal and professional relationships can coexist peacefully.

Turn to Investors

Of course, not everyone is comfortable with the idea of collaborating with a loved one. If partnering with a trusted friend or family member is out of the question, you should look for investors with who you can collaborate.

The key is to find investors who’re willing to fund the type of business you run. Before you pitch the idea to potential investors, make sure you’ve created a solid business plan that matches their interests and outlines your objectives and growth plan. Investors need to see that giving you money will benefit them one way or another, so be realistic about your business financials and growth potential.

Alternative Lending

Undoubtedly the best way to keep your cleaning business afloat during a financial crisis is by seeking alternative funding options. Alternative funding solutions typically involve collaborating with private lenders without having to exhaust your personal savings or take on additional stakeholders. You can apply for a business loan and get it approved fairly easily with this method.

 Common alternative lending options include:

Asset-Based Lending

In asset-based lending, you can use your assets as collateral for the business loan you take. The financing company that lends you the amount replaces you as the owner of those assets until the loan has been paid off. During this period, these assets are excluded from your balance sheet.

Lines of Credit

Lines of credit is a great alternative financing option for businesses that require funding for short-term expenses. For instance, if you need to purchase cleaning equipment or add to your inventory, you can receive funds to cover the costs.

Invoice Factoring

Invoice factoring is another option for your cleaning business if you offer commercial or B2B services. In this case, the invoices will be issued to your clients, and the copies will be sent to your lender, who will then pay a percentage of the invoiced sum.

How Can Cleaning Service Business Loans Help You?

Running a professional cleaning company isn’t easy. Acquiring a business loan via alternative financing solutions can help you cover both major and minor expenses. From the costs of new equipment and commercial-grade cleaning supplies to the amount needed for transporting employees to the client’s premises, a business loan will help you cover it all.

With a flexible business loan, you can continue to keep your company running and focus on the growth of your business instead of constantly worrying about its finances.

Alternative Funding Solutions for Cleaning Businesses

Ready to give your small business the funding it needs? QuickAssist is the ultimate alternative funding company to go to.

The company provides a range of small business financing options, helping cleaning companies access bank loan alternatives. The experts at QuickAssist will guide you through the entire alternative funding process, developing individualized business financing plans for your business along the way.

Apply today or get in touch with their team for more details about their business loans!

About the Author

 

The author is a former owner of a janitorial company in Florida who regularly writes about lending practices and business finance trends.

Sponsor Ads

• Ad Space Available - Rent it Now!

Created on Oct 22nd 2021 00:46. Viewed 305 times.

Comments