What You Need to Know
Cleaning services, or other building services companies, often have a low barrier to entry. However, keeping business running smoothly requires regular investments in your business, from purchasing cleaning supplies in bulk, acquiring new customers, and upgrading cleaning equipment like vacuums and commercial carpet steamers on a regular basis.
At the same time, you may have to bridge cash flow gaps while you wait for customers to pay you or cover payroll.
Financing for your cleaning service business can help. A line of credit or short-term loan can help you manage your cash flow or purchase cleaning supplies or equipment. Learn more about how to use small business loans for your cleaning services company.
Types of loans available for your cleaning services company
1. A Business Line of Credit: A business line of credit gives you access to flexible, revolving funds when you need them for your cleaning service. With a line of credit, you borrow what you need, pay down the balance, and the funds are replenished so you can use the line again. Most cleaning services will use a line of credit to cover upfront supply costs or to bridge cash flow in between invoices. Learn more about OnDeck's Business Line of Credit.
2. A Short-Term Business Loan: Many online lenders offer short-term business loans for small businesses like cleaning services. With terms that range from three months to three years, this type of financing makes it possible for a repair shop to borrow capital and repay it quickly—often making the total dollar cost lower than a longer-term loan. Getting a short-term business loan from an online lender can be much quicker than getting a traditional loan from a bank – typically, the borrower can apply in minutes and get their funds within days. Many cleaning services will use a short-term business loan to purchase cleaning supplies in bulk for a discount or run marketing or advertising campaigns. Learn more about OnDeck's Short Term Business Loan.
3. Equipment Financing: Equipment financing is another way to finance the purchase of business equipment (besides just using a loan or line of credit). Any tangible asset used in business operations can be considered business equipment. For cleaning service companies, this can include a vacuum cleaner, commercial rug cleaner, or the van used to go to different client appointments. Many cleaning services use equipment financing to purchase new equipment for their business without tying up their existing capital.
4. A Bank Loan: As a business owner, the financing option you’re likely most familiar with is a traditional bank loan. A bank loan typically requires collateral to secure the loan, and the application process tends to take several weeks. The length of the loan can be anywhere from 2-20 years. While the interest rates on a bank loan can be attractive, many cleaning services may find it hard to qualify for a bank loan and find the application process too slow for their cash flow needs.
5. The SBA (Small Business Administration) Loan Guarantee Program: Although the SBA is not a lender and provides financing through participating banks and credit unions (among others), the SBA Loan Guarantee Program will sometimes qualify a borrower who might not otherwise meet the more rigid criteria required by the bank. If your cleaning company is an established business, with a few years under its belt, and your personal credit score is above 680, this could be an option for your business.
Ready to get started?
Resources for Cleaning Service Small Businesses
How to Evaluate Your Small Business Marketing Plan
When you’re running a cleaning service, every resource you invest in your business is precious. While marketing is essential to sustain your business, how do you evaluate which initiatives are working?Learn More
Cash Flow: What Business Owners Should Know
You’re not alone if you find it to be a challenge to keep your cash flow steady as a cleaning service company– check out our tips on how to maximize your cash flow.Learn More
5 Best Practices for Your Employee Onboarding Process
For a cleaning service, your employees are often the only interaction your customers will have with your business. Make sure your employees are providing great customer service and doing a top-notch job out in the field by implementing 5 things into your onboarding process.Learn More
What type of loan makes sense for your business?
Financing options to help you grow your business
If you’ve ever heard the adage, “It takes money to make money,” you must be a small business owner. Fortunately, there are more small business loan options available today than ever before—you just need to know where to look and what to look for. You don’t need to be a financing expert to build a successful business, but you do need to consider all the business loan options available to determine which one is best to meet your business need.
Small Business Loans and Lines of Credit
With online lenders and lines of credit, there are more options available today than a traditional term loan from the bank when you need extra capital to fuel growth or fund other business initiatives.
Loans with a Purpose
Depending upon why you’re borrowing (your loan purpose), there could be an option custom fit to meet your business need. Here are some of the financing options available with specific use cases in mind.
Non-Traditional Financing Options
Sometimes it takes a different approach to meet a business’ financing needs. There are a number of options from micro-loans to funding sources that won’t even be described as a small business loan.
Each industry has specific loan types that may be better suited for your business. Here are some of the most common industries we work with and the financing options available to them.