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Many businesses can use financial help in getting off the ground and stay in operation. For security companies, where there are significant start-up costs and clients take weeks to pay, a business loan may be the best bet.
How Can a Business Loan Help your Security Company?
Starting and operating a security company can be a venture that costs hundreds of thousands of dollars. A business loan can help to cover some of the expenses for your security company.
- Payroll – In the security industry, clients can take time to pay invoices, but employees still need to be paid. A business loan can help with this cash flow problem while you wait for your invoices.
- Cash flow shortages – Because security companies don’t get paid upfront, this can result in cash flow issues. Avoid future cash flow shortages by paying current expenses with a business loan.
- Purchase Equipment – Security companies need expensive equipment to operate, such as security cameras, employees’ uniforms, and computers. A business loan can help to offset this expense.
- Marketing – For your company to get clients, it needs to advertise its services. A business loan can help pay off this start-up and ongoing expenses.
- Office Supplies – A business loan can cover the cost of office supplies used by a security company, including furniture and stationery.
- Rent – Security companies must have somewhere to operate. Business loans can pay for this location.
- Business license fees – Business license fees are payable before a security company can start operating. A business loan can cover them.
Getting a Business Loan For Your Security Company
Banks, alternative lenders, and government funding are all sources for business loans for your security company.
- Banks – Banks have strict lending standards. If you have bad credit or are starting a new business, the bank might not issue a loan to you. Banks typically offer better interest rates than alternative lenders.
- Alternative Lenders – Alternative lenders are less selective about who they issue loans to. Many alternative lenders offer loans to people with bad credit or with no business history. You can often quickly apply for these loans online. Because the lending standards are more flexible, alternative lenders offer higher interest rates than banks.
- Government Funding – Small businesses with gross revenues of $10 million or less can apply for loans under the Canada Small Business Financing Program. Up to $1 million can be applied for. The interest rate is the lenders’ single-family residential mortgage rate plus 3% or the lender’s prime lending rate plus 3%, depending on whether the interest rate is fixed or variable.
Best Business Loan Providers For Security Companies
| Amount | APR | Term (months) | ||
 | 1k-300k | Fee-Based: Starting at 9% | 12- 60 | Learn more |
 | 5k-300k | 8% – 29% | 6-18 | Learn more |
 | 1k-500k | +5.9% | 3-60 | Learn more |
 | Up to 300k | 8%-22% | 6-12 | Learn more |
 | 5k-500k | - | 6-18 | Learn more |
 | 100K + | 6.05% + | 60 | Learn more |
 | 5K-100k | 15%+ | 12-18 | Learn more |
Other Financing Options For Your Security Company
There are several other financing options available for your security company:
- Invoice Financing – In the security industry, invoices can take weeks or months to be paid. Some clients also pay late, further restricting cash flow. Invoice financing allows you to receive a cash advance as soon as an invoice is issued, so you have cash available to cover your expenses even if your clients pay late.
- Equipment Loan – An equipment loan is to be used on a specific equipment purchase, such as a security van, and is expected to be paid back with interest.
- Business Line of Credit – You can take money from a business line of credit as you need it. Since you only pay interest and fees on the money you use, it can be a great way to get additional funding for licenses and equipment if your business gets a large contract.
Tips on Starting Your Security Company
Security Business License
All security businesses must obtain a security business license before operating.
Terms of a business license:
- Register with the province you operate in
- Good for 3 years
- Can take 2 weeks to 6 months to obtain
- Requires $1 million in liability insurance
- You and your business partners must be of good character and have clean criminal records
Understanding Your Costs
Security companies have start-up costs and operating costs.
- Start-up costs
- Business license fees
- Equipment
- Insurance
- Legal and regulatory costs
- Office space
- Office supplies
- Marketing
- Operating costs
- Equipment maintenance
- Equipment purchases
- Insurance
- Payroll
- Office space
- Office supplies
- Marketing
Have a Good Business Plan
Loan providers look favourably on you if you have a good business plan.
A good business plan should include the following:
- Your business proposal
- A business feasibility study
- How your business is different from your competitors
- Market analysis
- Organizational and company structure
- Human resource requirements
- What assets the company needs to operate
- Financial information, such as projected revenues
Business Financing For Any Industry
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Business Loan FAQs
What do I need to fund my security company with a business loan?
Although different loan providers have different requirements to meet before you can apply for a business loan for your security company, the following requirements must generally be met:
- A satisfactory credit score
- Age and residency requirements
- No criminal record for you or your business partners
- You and your business partners must be able to pass a background check
- A business bank account
- An acceptable business plan
- A minimum gross monthly revenue for businesses already in operation
How do I increase my odds of obtaining a business loan for my security company if I have bad credit?
Even if you have bad credit, there is still a chance to obtain a business loan for your security company. To increase your odds of obtaining a business loan:
- Secure the loan with an asset – Your loan will have backing from the financial value of the asset. If you put up an asset as collateral for your loan, the lender can repossess the asset, sell it, and claim the money earned from the sale.
- Provide a business plan – Lenders like to see that business owners have clear plans for their business, especially a clear knowledge of cash inflows and outflows.
- Use a loan comparison site to get quotes – Comparing quotes on a loan comparison site will help you to find a business loan regardless of your credit history.
Can I get a no credit check business loan for my security company?
Yes, many alternative lenders offer no credit check business loans to security companies. These lenders offer higher interest rates on their loans than traditional lenders like banks, so beware of these loans.
Bottom Line
Business loans can help get your security company off the ground and can help it to navigate cash flow problems in tough times. Different lenders will issue loans to you depending on your credit history, which also helps to determine the interest rate you will pay on the loan. Because of how they can be used to support your business in an industry with slow payment times, a business loan is a great asset to any security company.
