Funeral Home Bad Credit Business Loans

The UK's funeral market continues to grow, making it a lucrative opportunity for funeral professionals who want to start their own venture. Perhaps you've worked as an employee for a number of years or are newly qualified - or you want to sell an existing business and start anew. Whatever your circumstances, you'll need finance to make the business happen. 

For some people, poor credit can limit their ability to raise the necessary business loans they need to start a new organisation. The funeral sector is a niche professional service, so lenders may be less willing to borrow if you can't prove you have a sound business proposition and reliable history of repayment. Bad credit makes your application less favourable. 

Fortunately, it doesn't prevent you from making your business dreams a reality. With the right help, you can start your own funeral home or buy an existing one and become an owner, regardless of your credit rating. Rangewell act as professional services finance experts who will review the lender's market, identify the right opportunities and then represent you during your application to make sure terms and rates suit your needs.

Just as your customers entrust you to carry out a vital service for their families, you can trust us to work with your best interests at heart. We understand the funeral industry and the finance requirements you'll have, from staffing costs, car leasing, premises lease and even specialist embalming and refrigeration equipment. 

We can help you with your application, but first take a look at our guidance below to see what sort of finance you may need and how you can mitigate the impact of a poor credit history. 

Existing funeral businesses with bad credit

If you already own a funeral home and have bad business credit, you may still be eligible for finance. While lenders will hesitate to offer preferential terms, they will still likely offer some form of finance. The challenge is in organising an agreement that suits your goals and the lender's perceived risk. 

Many lenders will demand guarantees around repayments and could even lend against equipment or assets. While offering securities to a lender may lessen the impact of your bad credit rating, it could be disastrous for you if an emergency occurred and you failed to make repayments. 

It's best to have a finance expert on your side when considering any commercial loan or mortgage, even if you have a business that is projected to grow in profit and revenue. You need someone who can negotiate on your behalf and identify lenders who understand the funeral industry and its steady profit growth projections. (The overall funeral service sector should grow around 4.8% annually). 

At Rangewell, we'll talk to lenders on your behalf and arrange finance that is balanced against any bad business credit. We'll work with you to strengthen your application and mitigate the impact of your financial history, instead focusing on showcasing the potential growth and prospects of your business. Get in touch below to learn more. 

CVA Business Credit

If you're a limited business and you've run into issues that have led to needing a Company Voluntary Arrangement (CVA) to repay creditors, we can help. Funeral homes have a strong business case for ongoing profitability and we can help you represent yourself in a good light to win lender interest and secure the CVA you need. 

CCJ Business Credit

Being hit with a County Court Judgement (CCJ) order is a challenge for any business. Funeral Directors who have been impacted by a CCJ shouldn't despair and give up on any future loans to grow their business. We can help you even if you've got outstanding CCJs, so don't be disheartened. 

Starting a funeral home with bad credit

To start a funeral home, you'll need the appropriate Funeral Director qualification and industry experience -- as well as capital to fund the purchase of your various premises, vehicles and equipment. You'll need to register the business with Companies House and choose a corporate structure.

Avoid Sole Trader status if you have poor credit, as all decisions will be made against your personal history. If you set up as a limited company, you may be able to mitigate the impact of poor credit, though without existing corporate history you may find lenders demand to scrutinise your personal finances. 

To start your funeral business, you'll either need to buy an existing funeral director or build/convert a new premises from scratch. Buying an existing funeral home can be more cost-effective, but depends on finding the right opportunities for sale and being able to secure business finance. 

Building or converting a funeral home necessitates a different approach, requiring development finance that is generally made up of a stack of lenders and capital. 

Ultimately, whichever route you choose, the more capital you have saved ahead of starting the business, the better rates you'll attract. However, there are certain steps you can follow to reduce the impact of bad credit or lack of capital and make your application more appealing. Here are our tips. 

Research the market & plan

When you're launching a funeral home business, you'll need to understand your market and make sure your proposition will appeal to customers. That means assessing the area for income levels and demographics, with a higher population of older people representing a better opportunity for funerals. 

Consider additional factors such as burial vs cremations in the area, since burials tend to offer more revenue opportunities because they have more involved ceremonies. Religious preferences and new trends like eco-friendly burials are also potential benefits or problems for your flegeling business, so make sure you know if the area you aim to start in has any specific funeral habits.

The biggest part of this research should be around competitors, identifying who your independent competition is and what they're doing to attract customers. Take a look at their Google Reviews, their websites, physical premises and any financial data you can find. Consider ways you can offer something unique that they lack.

Finally, take all of this research and construct a robust business plan.

Business plan essentials

This plan will be how you can convince a lender, even if you lack good credit and business ownership history, that you're a worthwhile investment. A well-researched business plan will demonstrate the need for your business and clearly outline the growth you have planned for the first few years.

While you will write it last, the executive summary should be placed at the start and recap the main findings of the business plan. 

The market and competitors section should discuss the market and competitors in relation to the business's chance of success. From this, you can construct a sales and marketing plan that summarises the ways in which the funeral business will be marketed to secure customers.

Create your financial projection section with the help of an accountant or business expert and ensure you include detailed costs, projected revenue and profit.

Finally, you'll need to outline your organisational structure. This section demonstrates the experience of the business owner, discusses the ownership structure of the business and details the day-to-day running of the funeral home.

Buying or building

Most Funeral Directors who wish to become owners will purchase an existing funeral business, or an existing funeral home which may no longer be in use. Doing so reduces the overall cost of the project as you'll already have much of the equipment and structure you need. However, it also depends on finding the right opportunities and negotiating the sale to your expectations. 

The alternative is to construct your own funeral home from scratch. This can be anything from a converted shop-front unit on a high street to a more involved facility. You'll need to raise finance to fund the construction work as well as to purchase the equipment and assets you'll need to get it launched. 

If you've got poor credit, the choice between buying or building becomes a question of which is more achievable in your area. Do your research before making any decision and get to know the lender's market first - as before you commit to either you must understand if a lender will even offer you the loan you need. 

What finance does a funeral director need?

The funeral home business loans that you need to take out will depend on your current business status. If you're setting up a funeral home from scratch, you'll need different loans and will have to expect different terms and rates compared to an existing owner. If you have bad credit, some finance agreements may be limited but there will be some options open to you. 

Existing owners can leverage their business assets to take out equipment loans and asset finance. Many of these loans will be balanced against your business' financial performance and background - so if you've got a bad business credit rating you'll need to do some planning before you apply to mitigate the impact it can have and to paint your business in the best light you can. 

You will also need to consider finance for construction or conversion work if you have to build your premises from scratch. Development finance has more stringent demands on a client's ability to repay, but can also be provided in a way that lessens the impact of bad credit by instead securing a lender's loan against the final value of the building. 

Support for funeral home loans with bad credit from Rangewell

Having bad business credit will limit your ability to gain the finance you need to start your funeral home business. As experts in the sector with long established lender relationships, we can help act as your financial partner, helping you to understand which lenders may be right for you, what financial products suit your goals and what rates or terms will be best. 

Don't let the lender's market overwhelm or dishearten you. Choose Rangewell to get a helping hand despite your credit history. Call today for a no-obligation chat.