Your landscaping company has it all: design skills, a great vision, a hardworking team and big projects to keep them busy throughout the year. But you have one major problem – you don’t have the cash you need to purchase equipment, materials, make payroll, or expand your company the way you want. Your solution is to look for financing options, but with the growth in the alternative lending space, there are a lot of pitfalls for business owners to avoid.
Even the most careful business owners can get tripped up over financing missteps that can prevent them from meeting their financing goals.
Here are the top 3 financing mistakes you could be making – and how to avoid them:
1. Picking the wrong lending product
Getting approved for a loan can be exciting, but before you rush into signing the deal you’ll need to make sure that you’re getting the right product that fits the need you’re trying to fulfil.
Are you in need of cash to continue with a big project while you’re waiting for a large invoice to get paid? Then a Receivables Purchase might be a great option, but if you only have an approval for a hard money loan that requires you to put up your property as collateral – that might be taking on too much risk for your business. In the event of a delay in the project’s completion, or a slow payment of the invoice, your business assets are put at risk of collections – not a risk worth taking.
This is just one example of how picking the wrong product can put you at risk, but there are many more missteps to watch out for.
2. Wasting time applying at the wrong places
Every lender has a different target market that they service. A bank, for example, might be looking for only established businesses that are able to show consistent revenue growth for years. In contrast, there are many alternative lenders that are happy to provide capital to businesses that only have 90 days of business operation.
Knowing where to apply is tricky. With hundreds of places to apply to, it might not be clear where to invest your time in structuring an application, speaking with the lender directly, and following up to get your approval – all running down the clock against fulfilling your financing need.
3. Not negotiating for the best deal
While the rise in the number of alternative lenders in recent years has created an industry that can be confusing to navigate, the upside of this is that hundreds of lenders are now competing for your business. This means that you have an opportunity to get financing deals with favorable terms in a way that wasn’t possible before.
Negotiating for the best rate is one of the best things you can do to keep the financing expenses low, but know when a deal is fair or not can be tricky. Going out to apply to multiple lenders on your own can be time consuming, and may not even provide you a good understanding of available offers for negotiating.
Want a lending expert to negotiate on your behalf?
LMN Lend provides financing tailored for businesses, helping you secure funds quickly and efficiently. LMN Lend is completely different than any funding solution you’ve tried before. A dedicated Funding Advisor will guide you through the application process. With more the 60 lenders that will compete for your business, your Funding Advisor will determine the best fit for your needs and negotiate on your behalf.
Getting started takes seconds and doesn’t affect your credit score. See what options you have available to you totally risk-free and no obligation.
