Business Loans
for Florists

The type of funding you’ll need, how much you should borrow, and how long you should take to pay back the loan will all change depending on if you’re already in business or opening a new florist shop.

If you’re already in business you have data available to inform borrowing decisions. You can predict cash flows and will know, for example, if you need to borrow to have inventory on hand for wedding season. 

Existing business owners have a history of credit card receipts, cash flows and income statements to include in a loan application. With a good idea of how you plan to use the funding – whether it’s expanding into a new space, adding a delivery route, or purchasing a new refrigerator for storage – you can demonstrate the increased revenues that the loan will bring into your business. Banks will look more favorably on your loan application – assuming you’ve been profitable. 

If you’re opening a new florist shop, it will be harder to qualify for a traditional loan. At a minimum, you’ll need a robust business plan and strong cash flow projections when you apply. You could have to pledge personal assets – such as investment or retirement accounts – to secure a loan. 

Banks want to know how you plan on making money, the amount of capital expenditures involved in opening a new store, and when you’ll turn a profit or break even. If you lack experience in the floral industry, they’ll be wary. Newer small business floral shop owners will find it harder to obtain a loan from traditional funding sources. 

Opening a new floral shop? You’ll have to locate a good space to lease and cover monthly rent while possibly renovating it. There will be upfront costs like buying and installing refrigerators, and once you’re in operation you’ll have to cover utility bills and other fixed expenses before your first sale. 

Renovating or expanding an existing floral shop? You could face many of the same costs. 

Here are some of the most popular reasons florists take out small business loans

• Purchase new equipment to replace old or broken refrigerators
• Expand their space or open a new location
• Add services, such as expanding into weddings or providing flowers for corporate events
• Cover operating expenses during lean times

How you intend to use the funds dictates the type of funding and term that best fits your business purposes. It will also tell you how much cash you need to fund the business plan. 

Now is the time to create a budget for your business. After you’ve paid fixed expenses like rent and utilities, how much free cash flow do you have to make loan payments? The size of your loan payment will depend on how much you borrow, so if you can’t afford the payment consider scaling back your plans.

Your business’s cash flows must cover the loan payments for your new florist shop – particularly if there will be a delay between when you have to pay for any renovations or equipment and when the new investment will generate revenues. After you’ve made a budget and determined what you can afford to borrow, include a plan to pay back the loan in your budget. And plan for the unexpected.

The contractor you hired to renovate the new space shows up a few days late. The refrigerators you bought are backordered. Make sure you have a fallback plan to make loan payments if there are delays. 

t’s not enough to know if expanding to floral design for weddings will add $20,000 in revenue. If you have to take out a $25,000 loan to pay new workers, lease or rent a van for transport, and order inventory, you’ve actually lost money. 

Anytime you plan on borrowing to fund a project its expected return should do more than cover the loan’s cost – it should also produce more income for your business in the long run. Evaluating a potential project can get quite complicated.  A simple expansion has many variables.

For example, the storefront next door has become empty and you have the opportunity to lease it and expand your space. Based on square footage, you could host floral design classes and add potted plants – like the popular succulents – to your inventory. Cash flow estimates show potential profit of $2,000 a month. 

Your landlord is willing to give you a reduced rent because you’ve been a good tenant, so rent would be $1,500 for the expanded space. Total cost to renovate and add space for classes, purchase inventory, and advertise the classes will be $5,000. Your contractor estimates it will take him two months to get to the renovations, so you’ll have to cover two months rent before the project generates income.

If you took out an $8,000 loan for a two-year term at 10% interest, your monthly payment is around $369. Based on that, you could lose $131 a month.  

Before taking out a loan to fund a business project, check if the project’s impact on your revenues will both pay back the loan and generate a profit. Maybe adding two more classes monthly could put you in the green. 

Your credit score and business’ credit history are an important part of any loan application. Lenders view a credit score as a sign of your creditworthiness, and it will impact their willingness to lend to you and the loan’s terms. Small business owners with poor credit will find it harder to borrow because lenders view them as a bigger risk. 

Before applying for a loan, check your credit score. Knowing it will give you an idea of the interest rate you’ll pay to borrow and which lenders will lend to you. Since a lower credit score reflects higher risk to the lender, you’ll pay more to borrow.