Financing: The Process of Securing Business Loans for Funeral Homes & Cemeteries
As the owner of a funeral home or cemetery, you understand that running a business is a very costly venture, especially when you’re attempting to acquire a new location, upgrade your existing equipment or building, or perhaps even add a crematory to your operation. That’s why securing financing is so critical. However, there’s more to financing than just finding a lender. It’s a complex and often lengthy process that requires a clear understanding of loan structures so you can determine which option best fits your needs. From start to finish, it can take months, but if you have a trusted and experienced partner by your side, it should go smoothly.
Initial Contact
This process begins by engaging a trusted team of professionals to assist in locating and securing funding for your operation. Your first meeting will consist of reviewing all of your loan options, completing a Return Financing Agreement, and establishing a professional services fee. You’ll also need to gather and organize key documentation, including financial statements and business plans, to prepare and submit a comprehensive financial data request. This is all of your information as requested by the funding entity or lender. One of the most critical steps is ensuring that all required documents and data are accurate and complete. This typically happens within 24 hours. However, missing or incorrect information can significantly delay the process.
Lender Package & Lender Bid Process
Once all of your data is in order, a lender package will be created. This is a collection of documents, such as business information, financial statements, the amount of money you need, and details on how and when you plan on paying back the loan that will be sent out to multiple lenders to gauge their interest in working with you. This takes 5-10 business days to complete.
Once the lending package is distributed, interested lenders will respond with a bid in another 5–10 business days. In the event you receive multiple lender bids, you will then choose the one that offers the most favorable terms for your business.
Underwriting & Credit Review
When you select a lender, they will begin a process known as underwriting, which involves thoroughly reviewing your financial information. This often takes 5-10 business days. During this stage, the lender will examine your overall income and revenue, assets and liabilities, the purpose of the loan, and any collateral or assets they can claim if you are unable to repay the loan. This may include a site visit by the lender.
In addition, the lender will also take a critical look at your credit history to determine how reliable you’ve been with repaying borrowed funds. This takes 48 hours. If you successfully pass the underwriting and credit review stages, the lender will issue you a commitment letter, which solidifies their commitment to provide you with a loan under their terms.
Closing & Your Funding Date
One of the final steps of the financing process is appropriately referred to as closing. This is where every document related to the loan is reviewed, signed, and finalized by the borrower, lender, legal counsel, and any advisors assisting you throughout the process. At this point, all the lender’s terms and conditions must be fully met before the loan agreement becomes legally binding and ready for disbursement. This can take anywhere between 60 and 90 business days.
After closing is complete, you will be provided with a funding date. This is the day when the lender will transfer the loan funds via wire transfer or check to the designated recipient (seller, vendor, escrow account, etc). Once you receive the funds, the loan’s terms, such as a repayment schedule and interest rate will be activated. From this point forward, you will begin a partnership with your Client Advisory Manager, who will act as your primary point of contact and resource throughout the lifespan of the loan.
Securing financing for your funeral home or cemetery is an important but complex process, especially when acquiring a new location or upgrading equipment or facilities. It should always begin by partnering with a trusted team of advisors who can help you understand your loan options and prepare a comprehensive lender package, including your business and financial documentation. Once potential lenders respond with bids, you’ll be able to select the loan that best fits your needs before undergoing a thorough process of underwriting and credit review by your chosen lender. After approval, the final paperwork will be completed, and your funds will be disbursed. Throughout this process and beyond, a Client Advisory Manager will support you every step of the way.