Loan Programs for Funeral Homes
If you are currently in or seeking to become a part of the death care profession, you are probably in need of some form of financing. And you’re in luck. There is financing available for the death care profession, and funeral home loans can include a wide range of loan programs. These programs include conventional financing, SBA Loan Programs, USDA Loan Programs and private money loans.
Depending on what the purpose is for your funeral home loan, a specific program will be required. Since your mortgage payment is likely to be the second largest monthly expense (behind only payroll) finding the right loan will have an enormous impact on your cash flow.
Here is a broad overview of the most common needs for funeral home loans and the different programs available for each of those needs.
New Business:
The most common type of financing used to start a new funeral home business is a small business loan. Start-up funeral home financing is perhaps the most difficult to secure but there are excellent options available. You will need to create a strategic business plan with realistic cost and revenue projections. Strong credit, extensive industry background and a reasonable cash injection will also help with the loan approval process.
Purchase/Acquisition:
It is often easier to finance the acquisition of an existing funeral home then it is to build one from the ground up. Established funeral homes have tax returns, call histories and pre-need sales that are very good indicators of future profitability.
Once you’ve identified an acquisition candidate make sure to conduct extensive due diligence on the business and the property before making a purchase decision. Your acquisition team should include an accountant, a lawyer and a funeral home financing specialist who can each help you avoid costly mistakes.
There are government guaranteed loan programs available which can provide up to 90% or more of the purchase price for qualified borrowers. Plan for the loan process to take as long as 90 days and build this time into your purchase offer.
While the current market environment makes funeral home acquisition loans challenging to secure, using the proper channels and working with an experienced financing specialist can greatly increase your chances for success.
Refinancing:
Unfortunately, there are many funeral home owners who are paying far more than necessary on their existing funeral home loan. In these cases, refinancing is often an excellent option even when no balloon payment is coming due.
Cash-out refinancing for funeral homes is also available to cover the costs of renovations, remodeling, purchasing equipment and even for inventory and working capital purposes. In these cases, it’s essential to have a complete list of how you will use your loan proceeds.
It is important to note that your individual needs and circumstances are completely unique and therefore it is critical for you to research which funeral home loan program and lender is right for you. Lenders vary based on credit requirements, programs offered, loan size, where the business is located, cash-in requirements, debt service requirements and more.
If you’ve ever been turned down for funeral home financing or waited in limbo for weeks while a lender dragged out a decision, you understand just how frustrating the process can be. Taking the time to find the right combination of lender and loan program will prove very valuable and well worth the effort.
If you’re ready to improve your cash flow, claim your FREE consultation for a funeral home loan to see if you are a candidate for refinancing: http://www.funeralhomeloan.com
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