Lines of Credit for Landscaping Companies: Surviving the Off-Season
How landscaping businesses can use lines of credit to manage seasonal cash flow, bridge slow periods, and prepare for peak season.
The Seasonal Cash Flow Challenge
Landscaping businesses face dramatic seasonal cash flow swings. Peak season brings more work than you can handle; off-season brings months with little revenue but ongoing expenses. A business line of credit smooths these cycles.
Draw funds during slow months to cover expenses, repay during busy season when cash flows in. The revolving nature matches landscaping's seasonal reality.
How Landscaping Uses Lines of Credit
- Off-season survival: Cover fixed costs when revenue drops
- Payroll gaps: Keep key employees through slow periods
- Pre-season preparation: Fund expenses before revenue starts
- Equipment maintenance: Winter repairs and preparation
- Opportunity capture: Jump on equipment deals or large projects
- Materials inventory: Stock up for known jobs
Line of Credit Options
| Type | Credit Limit | Rate Range | Best For |
|---|---|---|---|
| Bank LOC | $25K-$250K+ | 7-12% | Established companies with strong credit |
| Online LOC | $10K-$100K | 12-25% | Newer companies or faster access |
| SBA CAPLine | Up to $5M | Prime + 2.25-2.75% | Larger seasonal needs |
| Secured LOC | $50K-$500K | 6-10% | Companies with equipment collateral |
Managing Off-Season Cash Flow
A well-managed line of credit transforms off-season from crisis to manageable. Calculate your monthly fixed costs (rent, insurance, key employee salaries, loan payments). Your line should cover at least 3-4 months of these costs.
Draw gradually as needed, not all at once. You pay interest only on the outstanding balance.
Example: If your fixed monthly costs are $15,000 and off-season runs November through February, you need access to $45,000-60,000. A $75,000 line provides this plus cushion for unexpected needs.
Pre-Season Preparation
Before peak season starts, you need to prepare—equipment maintenance, materials, hiring. A line of credit funds this preparation before revenue begins.
Draw in February for spring preparation, then repay rapidly as March-April jobs generate revenue. This cycle repeats annually.
Retaining Key Employees
Losing skilled crew members to competitors during off-season is expensive—recruiting and training replacements costs more than keeping good employees.
Use your line of credit to maintain payroll for key employees through slow months. The cost of interest is far less than the cost of turnover.
If you offer snow removal or holiday lighting, you may be able to retain crews year-round without credit needs. Diversified revenue streams reduce reliance on credit.
Qualification Requirements
Line of credit approval typically requires 1-2 years in business, consistent seasonal revenue pattern, personal credit score of 650+, and demonstrated ability to manage through off-seasons.
Lenders want to see that you understand your seasonal cycles and manage them responsibly.
Building Your Credit Line
Start with what you can qualify for—even a $25,000 line helps. Use it responsibly through a full seasonal cycle, demonstrating that you draw during slow periods and repay during busy periods.
Request increases after successful years. Many landscapers build from small initial lines to $100,000+ over several years.
Strategic Discipline
Lines of credit require discipline. Use them for their intended purpose (seasonal management), not to cover unsustainable losses. Ensure you can repay during peak season—if you can't, the line masks rather than solves problems.
Plan draws and repayments ahead of time. Know your seasonal pattern and match credit use to it.
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Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
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