Funeral Homes Face Economic Crunch, Relief Found for Some
The current recession is putting a strain on profitability and cash flow for all businesses, and funeral homes are no exception. To make matters worse, the availability of financing for funeral home operations has been restricted over the past 12 months as many banks have all but stopped issuing new loans to small business owners while simultaneously not renewing existing financing.
Identifying the Problem
According to Ken Kaplan, owner of K2 Commercial Finance, a company specializing in working with funeral homes to identify and secure proper financing, part of the problem is the economy and the other part is a lack of awareness.
?Many funeral homes are financed with conventional mortgages and lines of credit that carry high interest rates and unfavorable terms. High financing costs divert money from marketing and other profit-generating uses,? says Kaplan. ?However, what they don?t know is that there are ways to address the problem. There are excellent financing options available that can create immediate positive cash flow.?
The problem is that many independent funeral home operators lack the time and expertise needed to secure the best financing options for their business. They incorrectly assume that their current financing arrangements are as good as will be available, so they look for other ways to cut costs.
?Working with someone who understands the industry, knows which lenders are actively financing funeral homes, what programs are available and how to efficiently navigate the loan process is essential to a successful outcome,? adds Kaplan. ?Properly structured financing can literally be the difference between success and failure.?
Enjoying the Solutions
Don O?Guinn, president of Michigan-based O?Guinn Family Funeral Homes, was facing a balloon payment and had a lender who refused to renew the loan. Working with K2 Commercial Finance, he was able to save thousands of dollars per month after refinancing the mortgages on three properties,
?There are very few lenders in the funeral service sector, these days, and those there are charge excessive fees and exorbitant rates,? says O?Guinn. ?No one was lending, credit was extremely tight, and I was in a real bind..?
Like many business owners, O?Guinn did not know that his business qualified for government guaranteed lending programs and received no help from his local bank. Fortunately, he was referred to K2 Commercial Finance and was able to successfully refinance his business.
?Ken negotiated a huge discount with our prior lender, secured SBA- and USDA-backed loans at huge savings to us, both in mortgage payments and interest rates, with overall savings that we would never have dreamed possible,? adds O?Guinn. ?We are now enjoying greater cash flow, reduced debt, affordable payments and peace of mind, knowing that we will never again be faced with a balloon payment.?
The current recession is wreaking havoc with businesses in every industry but it also is a time of great opportunity. Funeral home operators must manage cash flow while looking for ways to profitably grow and develop their business.
Refinancing a mortgage now, while rates are low and funds are available, may represent the single greatest opportunity to improve cash flow and secure long-term success for your business. There are real solutions that others are finding, in order to get back on track and back to business. The key is to find a commercial mortgage specialist who can structure your loan request and move it confidently through the funding process.
Contact K2 Commercial Finance to discuss your loan scenario with no cost or obligation. Our phone number is 866-766-0588 or email [email protected] . We can quickly help you determine what your best options are and appreciate the opportunity to be of service. Visit www.funeralhomeloan.com for more information.
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