Business Loans for Funeral Homes

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Choosing the Best Funeral Home Loan Program

It’s no secret that small business funeral home owners, cremation professionals, and the death care industry as a whole have had difficulty in getting funeral home financing. Whether you go to a credit union or bank, it is tough for funeral home owners to get any type of funeral home loan or any bank loan for that matter. Funeral home financing can be a tricky process. A traditional lender, community bank, or credit union can have excellent financing terms but still see risk when lending to small funeral home businesses. These lenders won’t give funeral home loans out to just any business. They’ll likely ask for a funeral home owner to have great credit, experience, a robust business plan, and require a significant amount of information and documentation from the company to access credit. AdvancePoint Capital has tons of experience and knowledge with funeral home loans, helping you access various business lending products, terms, and payment options your business needs. We understand the difficulties of operating a funeral home and the need for funding to support it. Our job is to provide you the best funeral home loan to operate your funeral home business effectively. Whether you’re looking to purchase equipment, need working capital, expand the funeral home’s operations, or take on a new opportunity, we are your ultimate lending source.

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6 of the Best Business Loans for Funeral Homes

Long-Term Business Loans for Funeral Homes

Long-term loans are always the most desirable as they offer the longest repayment terms, typically from 2 to 7 years. Long-term loans are a lump sum provided upfront with an interest rate starting at 7%, with monthly payments over a fixed repayment period.

These loans require high credit standards for established funeral home businesses with at least two years in business in the funeral home industry and a significant amount of paperwork for approval.


  • Low interest rates starting at 7%
  • Term loans from 2 to 7 years to repay
  • Accommodates a larger loan amount
  • Monthly payments

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Long-Term Funeral Home Loans

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Short Term Small Business Loan for Funeral Homes

Short-term loans are term loans that provide a fixed amount of money, repaid over terms of 6 to 18 months. When approved, you get a fixed amount for a set payback amount. The difference between is the cost, with a fixed payment auto-deducted from your bank account monthly, bi-weekly, weekly, or in some cases daily out of the bank account.

Limited paperwork is required, with only a 1-page application and bank statements. The credit requirements for a short-term loan are more lenient than that of banks or traditional term loans due to the reduced risk.

Benefits for Short Term Business Loans:

  • Excellent to poor credit score considered
  • Loan amount as little as $10,000 up to $500,000
  • Repayment terms are 6 to 18 months to repay
  • Lower monthly or annual revenue requirements than those of traditional loans
  • Fast and simple application process with the same day to next day financing
  • Limited documentation required

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Short-Term Funeral Home Loans

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Business Line of Credit for Funeral Homes

A business line of credit is a small business financing option that offers a flexible feature that a short-term loan does not. It works like a credit card in that it is a revolving credit line and allows you to draw money out and then repay at any time with you only paying principal and interest on your outstanding balance.

Lines of credit have a credit limit that you cannot exceed and is set at the time of consummation. Business lines of credit are not considered term loans but revolving lines of credit.

Highlights of a Line of Credit:

  • Ability to draw money at any time from lines of credit
  • Allows borrowers to spend the money, repay it, and spend it again
  • Principal and interest rates starting at 5% for lines of credit
  • Lower costs and fees than most other financing products

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Business Lines of Credit

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Small Business Administration [SBA] Loans for Funeral Homes

The U. S. Small Business Administration (SBA) is a federal government agency headquartered in Washington DC that provides resources, programs, guidelines, and small business loan guarantees to approved SBA Lenders to issue loans to small businesses.

The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, and grow their businesses successfully. The SBA is not a lender. The Small Business Administration provides a guarantee that gives the approved SBA lender the ability to take on the risk of lending and decisions under SBA term’s that they would not ordinarily do so on their own and has all rights reserved for any recourse need.

SBA loan application processes can be lengthy, but with the help of an experienced, SBA-approved lender to help your funeral home business through the applications process so the Small Business Administration application package can be a smooth and efficient experience. Some loan products require commercial real estate as collateral.

SBA Product Overview:

Loan Amount Limits: Up to 10 million
Interest Rates: Starting at 3.50%, treasury index plus 1% to 2.5%
Loan Terms: 3 to 25 years
Fees: Origination fees 0% to 3%
Payments: Fixed monthly
Credit: Good to excellent credit score required
Application Process: SBA loan application, business assets, and numerous financial statements

U. S. Small Business Administration Loan Programs:

SBA Standard 7(a) – SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to businesses with a good track record. This loan is used mainly in the funeral home industry for working capital, expansion, and business acquisitions.

SBA 504 – The SBA 504 Loan is a small business term loan and a powerful economic development loan program that provides businesses another avenue source for funding while promoting economic development and equity. SBA 504 is typically for significant capital needs like real estate transactions.

The use of proceeds from the SBA 504 Loan must be used for fixed assets such as construction, owner-occupied commercial property, or mixed-use real estate. Common uses for SBA 504 loans include; repair facilities, land improvements (and certain soft costs), growth, and expansion, or can also be used to refinance existing debt on your small business.

SBA Disaster Small Business Loan Program – SBA Economic Injury Disaster Loans (EIDL) – This type of SBA loan assists small businesses after natural disasters like tornadoes, wildfires, or floods, and also when Coronavirus (COVID -19) was declared a nationwide health emergency. Congress provides small businesses with access to relief options through this SBA loan for emergency funding.

SBA Paycheck Protection Program (PPP) – The Small Business Administration (SBA) has established the SBA Paycheck Protection Program (PPP loan) in response to COVID-19. This is one of SBA’s relief options that provides loans to small businesses affected by the Coronavirus (COVID-19) crisis and needs financial help.

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SBA Loans

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Merchant Cash Advance for Funeral Homes

Merchant cash advance (also now as Future Receivables Purchase and Sale Agreements) provide an upfront lump sum of money in exchange for a fixed percentage of the businesses’ future sales. Repayment is typically made daily or weekly.

Either ACH payments auto deducted from a business’s bank account, or the percentage is taken out of future credit card sales until the payback obligation is met. Terms are expressed as a future sale, so you are given a fixed amount and then responsible for paying back a more significant amount through a fixed percentage of future sales. The difference between the amount given and the amount paid back to complete the agreement is your fixed cost.

The estimated time to repay is typically 6 to 18 months, but there are no term limits as the repayment is based on future sales, and this product is not considered a term loan.

Benefits of Merchant Cash Advances for Funeral Homes:

  • Flexible repayment terms attached to future sales
  • Excellent to poor credit score considered
  • Provides funds to owners with sub-prime credit
  • Limited documentation required

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Merchant Cash Advances

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Business Credit Cards for Funeral Homes

Business credit cards are revolving credit with a credit limit with a minimum monthly payment requirement lower than a small loan. You are issued a plastic card with an account number that can be used online and in person for any purchases. You only pay interest based on the current principal. Credit cards are not considered loans but revolving lines of credit.

Benefits of Credit Cards for Funeral Homes:

  • It can be used 24 hours a day, seven days a week
  • No limitations on the use of funds
  • Flexible monthly payments payments
  • Principal & Interest rates

Identify Why You Need a Business Loan

The first step in any search is clearly defining why your small business needs the funds. The “why” will direct you many times to the right loan product. Working capital is the most popular reason because there are so many ways it can be used. When cash flow gets tight due to fluctuations in sales, extra capital can provide the buffer needed to carry the business through rough times.Other reasons for the need for business financing include, but not limited to:

Working Capital

Sometimes cash flow can get tight, and a working capital loan is needed to maintain proper levels of money to operate the business.

Business Needs

A new venture that requires a down payment, upfront capital, recruiting key employees, initiating a new business relationship, or research and development.


Common need for eCommerce, manufacturers, and other retailers.

Infrastructure Improvements

This category could include a move to a more prominent location or office that requires capital.

Information Technology & Software

In today’s world, capital may be needed for business needs related to website development and site maintenance, customer relations management software, computers, machines, and other products essential for a business’s success.


Small business owners need funds to promote their business. A variety of advertising strategies include internet marketing, direct mail, radio advertising, flyers, and paper ads, to name a few.


Most small businesses have some type of equipment. Perhaps you’re a business that requires machinery, furniture, medical equipment, construction equipment, computers, or tools. These are common requests from restaurants, auto repair shops, construction industries, medical practices, and manufacturers.

Benefits of Funeral Home Financing

Working Capital Loans

Operating small businesses like a funeral home is a complicated venture with many moving parts to it. Various issues can impact the cash flow, like seasonality, holidays, location, changes in trends, and competition. Meeting payroll for employees is not an option, so it’s essential to have access to capital to control the ups and downs and stabilize cash flow. Having a financing option to satisfy cash flow needs is a must.

Business Facility Expansion or Renovations

Your funeral home may need upgrades or repairs to facilities or something to spruce up the interior or exterior appearance of the funeral home, maintaining or attracting customers, and a competitive edge. Perhaps you’re adding a new location. With so many financing terms and options available, growing your funeral home can come in many forms. Funeral home financing options can be used to purchase additional inventory, lease more space, expand marketing efforts, buy new equipment, or even open up another operation.

Advertising: Attracting Customers to a Funeral Home

What funeral home owner doesn’t want more customers? Internet marketing and social media are not just a trend but a must for a funeral home owner looking to grow. Advertising expenses have added additional costs to funeral home operations. That’s why financing for marketing campaigns and social media is so popular.

Having a presence on the internet with a funeral home website and other various sources like Google and Yelp and maintaining a social media presence with Facebook and Instagram is very important for success. Your website and work on search engine optimization help keep your business ranking highly with Google search when someone looks up “funeral home” in their internet search.

How Do You Get a Business Loan for a Funeral Home?

There are many options to consider with such a wide range of lenders and funding options available, but it can be challenging to get started. Lenders will want pertinent information and documentation from store owners, regardless of whether they’re an online lender or a traditional financial institution. This information mainly serves to confirm your funeral home’s financial history and legitimacy— and business owners should be informed about what information they should have on hand before applying for a funeral home loan.

Depending on the type of funding you’re looking at, each will have different requirements. However, there are some standard questions that you can expect to run across during your search.

How Long Has the Funeral Home Been in Business?

Time in business is a standard requirement for business loans — or any type of financing you plan on obtaining. A young funeral home is far riskier than a seasoned one. This shouldn’t be news to any funeral home owner reading this, but it’s essential for funeral directors.

Due to the high risk of financing, lenders must know if you’ve been around for a substantial amount of time. This shows that you’re able to overcome obstacles and tackle challenges that come with time in business. If so, you’re in much better shape to obtain financing for your funeral home and receive favorable financing terms.

How Do You Handle Money From the Funeral Home?

There are documents that many lenders will require so that they can help assess a funeral home loan’s risk. When planning on getting funeral home loans, make sure to offer your business’s bank statements, personal and business tax returns, profit and loss, income statements, cash flow forecast, and, even more, depending on the funding option. This information proves any revenue and profit — which is frequently a big player in whether or not you’ll qualify for funeral home loans.

Now, what paperwork you’ll need ultimately depends on the funeral home financing itself. A business cash advance may require one thing, but a term loan is likely to have much harsher requirements. However, all of these documents we mentioned are relatively typical when attempting to obtain funeral home loans.

What Are Your Borrowing Habits?

While many financing options have varying credit score requirements, all of them will require some sort of personal and business credit score and overall credit history. Funeral directors need to show lenders how well they can manage funeral home loans.

It’s all about trust and sound investments when it comes to financing. So, a credit score is a great way to show banks that your borrowing habits are fruitful for the lender. Even if you have less than stellar credit, there are still funeral home loans that you can seek.

However, the interest or terms will be more costly due to bad credit. You won’t see banks or credit unions offer loans to poor credit borrowers. That being said, alternative finance companies still provide financing opportunities that funeral home owners can take advantage of for any need. Make sure you are constantly working to improve your personal credit.

Frequently Asked Questions

This depends on which funeral home you’re considering. Different financing options will have additional application requirements — so there’s no one size fits all solution to this question.

However, there are some typical avenues that many funeral home owners take to open up a funeral home. Ensure you have a sound business plan, projected financial statements, ownership and affiliation documents, certificates or licensure, income tax returns, and a resume available.

Did you know that funeral homes don’t have to be profitable to get funding? It helps if they do, but it is not required. Funeral homes can be an excellent opportunity because the funeral industry is somewhat recession-proof in the good times and the bad.

The value of the funeral home business will be based on the book of business, annual revenue, and length of time of ownership in the area. Whether the funeral home business owns the commercial real estate it’s located within also weighs into value.

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