Many lawn care business owners face funding denials that have little to do with their business’s actual value but instead stem from lenders’ interpretations of financial strength. Common issues include a lack of proper business documentation, especially for businesses that started informally, without a business checking account or invoices. Inconsistent income patterns are another challenge, as lawn care is a seasonal industry, leading to fluctuating revenue that may concern lenders looking for consistent cash flow. Additionally, traditional lenders often require at least 12 months of operating history, making it difficult for newer businesses to qualify, even if they’ve been operating for years. Low credit scores can also be a barrier, as lenders often view them as a sign of financial risk. Weak cash flow patterns, such as unpredictable deposits or unplanned expenses, can also raise concerns. Businesses with significant existing debt may also struggle to secure financing, as lenders are wary of high debt obligations. Finally, requesting the wrong type of loan can result in denial, as many lawn care businesses opt for general-purpose loans instead of more specialized financing options. Addressing these common issues can improve the chances of securing funding.
source: https://cardiff.co/learn/lawn-care-businesses-struggle-to-qualify-for-financing/
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