Editor's choice: First Down Funding business loans
- Works with bad credit and most industries
- Only 100 days in business required
- No credit check
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.
New and established cleaning businesses can choose from any number of options, depending on the need.
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 Small Business Administration 7(a) loan, which means low rates for larger amounts.
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.
Microloans are small, unsecured business loans for owners who may not need or qualify for large loan amounts — you could potentially borrow as little as $25 with services like Kiva. 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.
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.
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.
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.
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.
To start your search, select your loan amount, annual revenue, time in business and personal credit score. Then click Show loans.
Like most business loans, you can use your funding for a variety of purposes, including:
Your lender may have some restrictions, but in general, you should be able to use your funds for whatever your cleaning business needs.
Once you know the type of financing your business needs, consider these five factors when selecting a lender:
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.
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.
Franchising fees typically run between $10,000 to $50,000 or more — and that doesn't include the working capital requirement. These vary by business, so we've compiled a list of the top residential and commercial cleaning services to demonstrate the potential cost.
360clean | Commercial | $10,0000 | $15,000 |
Jan-Pro | Commercial | $3,100–$60,000 | Varies |
Merry Maids | Residential | $37,500–$51,500 | $35,000 |
Molly Maid | Residential | $14,900 | Varies |
ServiceMaster Clean | Both | $69,500 | $85,000 |
Stratus Building Solutions | Commercial | $7,500–$575,000 | Varies |
The Cleaning Authority | Residential | $30,000–$65,000 | $50,000 |
Vanguard Cleaning Systems | Commercial | $2,500 | Varies |
Information is from Franchise Direct as of September 2020. Keep in mind that this table doesn't cover the full range of franchise opportunities or the total costs. If you're interested in franchising with a company, contact its management team to learn more details about the expense and how to start the process.
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.
The success of your business depends on you — these tips can help you get ahead when you're just starting out.
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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