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How to finance a cleaning service

Explore funding options to start or expand your business.

Financing is an invaluable tool for both new and established cleaning services. A wide variety of loan options are available to businesses of all sizes — so your best option will be to narrow down your specific needs before applying with a lender.

7 ways to finance your cleaning business

New and established cleaning businesses can choose from any number of options, depending on the need.

1. Business loans

A business loan is a good choice for an established cleaning service looking to expand. They can be used as a source of working capital for marketing, hiring employees and purchasing storage space — all key for building out your business.

You will need to have a few years in business to qualify for most term loans — and present a strong business plan. But your options are endless. You can look to banks, credit unions and online lenders for funding, and your business may even qualify for a Canada Small Business Financing Program (CSBFP) loan, which means low rates for larger amounts.

See top business loans for your cleaning business

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
SharpShooter Funding Business Loan

Prime pricing from 9.00%

$500 – $500,000

6 – 60 months

$10,000 /month

6 months

Unsecured Term, Merchant Cash Advance, Invoice Factoring
To be eligible, you must have been in business for at least 6 months with a minimum of $10,000 in monthly deposits.

SharpShooter provides capital to small businesses that are underserved by banks and credit unions. It measures overall business health and potential rather than focusing strictly on traditional metrics. Fill out a simple application and get pre-approved in minutes. Receive your funds within 24 hours.

Lending Loop Business Loan

Starting at 4.96%

$10,000 – $500,000

3 – 60 months

$8,500 /month

12 months

P2P
To be eligible, you must have been in business for at least 12 months and have a minimum of $100,000 in annual revenue.

Lending Loop is Canada’s first regulated peer-to-peer lending platform. Complete an application in 5 minutes. Once you accept your loan offer, investors will begin to fund your loan on the marketplace. Your loan will be transferred to your bank account when it is fully funded.

OnDeck Business Loan

8.00% – 29.00%

$5,000 – $300,000

6 – 18 months

$10,000 /month

6 months

Secured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum monthly revenue of $10,000.

OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.

Loans Canada Business Loan

Prime Pricing from 9.00%

$2,000 – $350,000

3 – 60 months

$4,166 /month

100 days

Unsecured Term
To be eligible, you must have been in business for at least 100 days, have a credit score of 410+ and show a minimum of $4,166 in monthly deposits ($50,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $350,000. Complete one simple online application and get matched with your loan options.

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2. Business lines of credit

Business lines of credit provide more flexible access to working capital for cleaning services. If your work is seasonal or you have a fluctuating amount of clients, a line of credit can help you keep things running when business slows. And like term loans, they're available from a wide variety of lenders to suit businesses at every stage of development.

3. Microloans

Microloans are small, unsecured business loans for owners who may not need or qualify for large loan amounts. However, the turnaround may take up to a month, especially if you use a crowdfunding system. For cleaning businesses that need money for small supplies, it may be easier to turn to a business credit card.

4. Equipment financing

If you need industrial equipment for commercial projects or want to invest in new transportation, an equipment loan may be the best choice. These typically have lower rates than unsecured loans and may be easier to qualify for if you are a new business owner.

5. Business credit cards

Business credit cards allow you to make smaller purchases — like cleaning supplies — under your business's name. Provided you pay them off before the end of your billing cycle, they can be a useful way to finance your cleaning service without spending money on interest.

6. Short-term business loans

Short-term business loans are an expensive option best used when your business needs a quick influx of cash. If you take payments through credit cards or receive invoices from commercial clients, then you may be able to use a merchant cash advance or invoice factoring to help get through a dip in revenue. However, the fees are more complicated than traditional business financing — and payments are usually made daily or weekly.

7. Personal loans and credit cards

A personal loan or credit card may be helpful if you're just getting started. If you only need to fund licensing, insurance, marketing and basic supplies, you can use a card you already have or apply for a small personal loan. While the rates won't be as competitive as options geared toward businesses, they are much easier to qualify for. Just make sure the lender allows you to use the funds for business expenses before you apply.

What you can use a cleaning business loan for

Like most business loans, you can use your funding for a variety of purposes, including:

  • Supplies
  • Equipment
  • Licensing
  • Permits
  • Marketing
  • Employees

Your lender may have some restrictions, but in general, you should be able to use your funds for whatever your cleaning business needs.

What to consider when comparing business loans

Once you know the type of financing your business needs, consider these five factors when selecting a lender:

  • Loan amount. Ask your lender what its upper and lower loan amounts are. If you need more than the maximum — or less than the minimum — pick a different lender.
  • APR. Most types of financing will have a maximum APR of 29%. The lower the APR, the less you'll spend on interest and fees. And the less you spend, the more money you'll have to invest back into your cleaning business.
  • Term. The type of financing you choose will determine your loan term. The longer your loan term, the lower your monthly repayment — and the more you pay in interest. Strike a balance between loan term and monthly payment to get the most out of your loan.
  • Fees. Origination fees and prepayment penalties are common and can quickly add to the cost of your loan. Try to find a lender that charges neither. At the very least, pick one that charges less than its competitors.
  • Eligibility requirements. Banks tend to prefer established businesses with at least $100,000 in annual revenue, while online lenders can have less strict requirements. If you don't meet the business or personal eligibility standards set by your lender, you won't be approved.

How to improve your odds of approval

Lenders want to see that your business has a well-informed business plan and budget. When you're ready to apply, you should know information about your market — whether that's residential or commercial cleaning, the area you plan on working in or the type of equipment you need for large projects.

For new business owners, lenders will also want to see that you have experience with professional cleaning and management. While it's not always a requirement, you will need to have at least a year in business and a high monthly or annual revenue to qualify for most loans.

How much does starting a cleaning business cost?

Cleaning businesses have lower startup costs than many other businesses — largely because you only need to invest in basic supplies and marketing. Since there's no need for formal training or certification, you can realistically begin your business with your own supplies while using your social network to find prospective clients. But if you plan on buying an existing franchise, you should still expect to pay at least $15,000 in startup costs.

How much it costs to buy an existing franchise

Franchising fees typically run between $10,000 to $50,000 or more — and that doesn't include the working capital requirement which can run between $15,000 to $85,000 or more . These vary by business.

How much it costs to start an independent business

Starting an independent cleaning business may only run you a few thousand dollars. In general, cleaning services have much lower startup costs than other businesses. Your main startup costs will be limited to basic supplies, marketing, insurance and licenses. The exact expense will depend on your area.

However, purchasing extra storage space, a business vehicle or specialized equipment can be costly. Your niche will also influence the cost — industrial cleaning supplies for commercial work will likely run you more than residential cleaning supplies.

5 tips for running a successful cleaning business

The success of your business depends on you — these tips can help you get ahead when you're just starting out.

  1. Understand your local market. Your area should play a role in the services you offer. If there are cleaning businesses already working, you need to know how to stand out. The type of clients you can snag will also depend on where you want to work.
  2. Invest in a specialty service. The type of cleaning you do will also influence the clients you have and competition you face. If you can offer a specialty service — like sanitation of office spaces — you may be able to snag a niche other businesses haven't invested in.
  3. Stick to a budget. Supplies will be the most common cost to your business, but don't discount marketing when trying to reach clients. And if you plan to expand, you'll also need to have room in your budget for additional employees and transportation.
  4. Keep up with licenses and insurance. Although the exact cost will depend on your area, you will need liability insurance on top of the licenses and permits your municipality requires for you to operate a small business.
  5. Develop strong relationships with clients. Your clients are your bread and butter. When you're starting out, word of mouth will be your ally. As you expand, having good reviews will also help you earn new clients while keeping your current ones happy.

Bottom line

Starting a cleaning business — or finding funding for your established service — is relatively simple. Provided you know what you're looking for in a loan, you should be able to compare business loans and choose the right lender to take your business to the next level.

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