Starting a mover’s company isn’t easy. While you must be passionate about the business you start, you must also be very careful about financial planning.
It’ll require enough money, from initial expenses like security deposits and leasehold improvements to ongoing operational costs.
That’s why it’s crucial to understand the financial challenges ahead and devise ways to counter them in the future.
In this article, we have discussed how you can secure funding for your moving company. Keep reading.
Average Costs for Starting a Moving Company
Before you go ahead and set up your moving company structure, make sure to check out the checklist of different costs we have listed in this article.
| Expense Category | Estimated Cost |
|---|---|
| Security Deposits | $2,000 to $6,000 |
| Leasehold Improvements | $1,000 to $10,000 |
| Office Inventory and Furniture | $4,500 to $15,000 |
| Employee Training | $2,000 to $4,000 |
| Recruitment Cost | $3,000 to $5,000 |
| Business Registration | $150 to $300 |
| Business Plan | $100 to $250 |
| Legal Help | $1,000 to $3,000 |
| Licenses and Permits | $250 to $1,000 |
| MC (Motor Carrier) Number | $0 to $300 |
| Annual Insurance | $2,000 to $5,000 |
| Initial Marketing Costs | $2,000 to $10,000 |
| Signage Costs | $2,000 to $12,000 |
| Moving Equipment and Supplies | $1,000 to $15,000 |
| Purchasing Moving Vehicles | $20,000 to $150,000 |
| Total | $41,000 to $236,850 |
Mover’s Company Funding: Why Do You Need Funding?
Moving companies may need funding in different stages of running the business. For businesses kicking off the ground, a considerable amount might be needed in funding.
On the contrary, a business trying to expand its reach may need funding for upgrading equipment, purchasing storage facilities, or tech equipment. Following are some scenarios under which you might want to get mover’s company funding –
Upgrading Vehicles:
If you are expanding your business, consider upgrading your moving vehicles. This can include getting a vehicle.
Maintenance & Repairs:
You can use that fund for regular maintenance and to make necessary repairs to your equipment and your vehicles.
Buying new Moving Equipment:
You can only run a moving company with the best moving equipment. You can use dollies, furniture pads, and packing materials.
Insurance premiums:
You have to cover the cost of insurance and pay premiums month after month. If you don’t have a rough budget for that, you can take a loan for that.
Storage Facility Upgrade:
Ensure that you upgrade your storage facility, so your customers have temporary storage when needed.
Fuel Cost Management:
When running a moving company, you need to optimize your fuel costs for good ROI. With extra funding, you can stand against the fluctuating fuel cost.
Technology Upgrade:
Use advanced logistics and scheduling software for optimizing operations.
Safety Equipment & Protocols:
You can also invest in your safety equipment to protect the belongings of your customers and your employees.
Hire Additional Staff:
Hire additional staff if your business needs extra hands when expanding. But you need the mover company’s funding to attract new employees.
Website and Online System:
It would help if you worked on your branding for your moving company to stand out. So, optimizing your website becomes very important. In this case also, you’ll need funding.
Best Ways to Get Mover’s Company Funding
Here are the best options when it comes to choosing funding options for moving companies in the USA.
1. Debit Capitals
For short-term mover company funding, you can opt for debt capital. Taking loans from debt capital is similar to taking loans as an individual. Small businesses like moving companies would benefit from this instant loan option.
Debt capital Works in two different modes. You can take them from authorized organizations in the form of traditional loans. You can also take debt capital from individual lenders. There are a wide number of investors who become lenders at some point.
However, the process isn’t a simple one. You have to start by building a strong financial profile. Include a strong business plan and detail your cash flow projections. Don’t forget to include a clear understanding of the collateral options.
Once you have all this documentation, contact online lenders or traditional farms that provide debt capital to small businesses like a moving company.
2. MCashAdvance
MCashAdvance is a platform offering mover company funding to business owners in this industry. However, ensure you know their eligibility criteria for applying for this loan.
Here are some criteria you must maintain for MCashAdvance –
- First, your business must be operational for the last 6 months.
- A revenue of $100,000 per year is a must.
- Your FICO score (as the company owner) must be above 550.
- The business must have a business checking account.
- You must be over 18 years old.
If you meet these criteria, you can apply for the loan online. Start by filling in your details, submit the bank details, and wait for your review process. Next up, receive your offer and funding if the application is approved.
3. Bank Loan
Getting a bank loan for a mover’s company funding is also a type of debt capital you borrow. Here also, you have to start by building your solid business plan, and a strong financial statement, demonstrate your market understanding, collaterals, and more.
When applying for your funding needs to the bank, outline what you want to do with the funding. Thai could be for your property or equipment requirement for the business. You should invest some money in loans to acquire trucks, hire staff, and cover different operational expenses. You can also look for specific business loan programs If not bank loans.
However, if you are taking bank loans, you can expect an interest rate of 5% to 10%. You can take a tenure of 1 to 30 years for the loan.
4. SBA Loans
Whether you want to start a moving company or grow your existing business, the SBA platform has several loan options. You can choose from many loan programs on the SBA platform for small business owners.
These loans can be great options for people who want to retain their control but can’t do so due to a lack of funds. However, you must fulfill some criteria for getting the loans you want for your mover’s company.
Prepare your documents: You must start by preparing your documentation for the loan. You need your business plan ready, the expense sheet, and a financial projection for the next five years.
You should also contact different banks and credit unions to compare your available loans. This way, you can choose from the best terms. Also, head to the SBA.gov platform to check your eligibility for any of these loans.
For SBA loans, you can expect an interest rate of 5.5% to 8.5% and take it for 3 to 25 years.
5. Asset Based Loan
Another way to get Mover’s company funding is through asset-based loans. Start by identifying the assets you have in the business that you can use as your collateral. This could include your equipment, accounts receivable, vehicles, etc.
When taking loans against your assets, ensure to research your lenders. Choosing loans from organizations like Bank of America, First Citizens Bank, and RBC Capital Market is best. Make sure you have all the documentation ready for the loan. What happens now is that you get to choose what’s best for you.
Conclusion
In conclusion, launching and running a successful moving company involves navigating various costs and funding options. Start by analyzing different avenues of seeking financial help for your business to kick off the ground. But, if you need funding later on, your strategy should be a little different. Always make sure what exactly you are looking for in funding options.
Is it for marketing, equipment, repairs, or staffing? Prepare your funding strategy according to your needs and prepare yourself for loan repayment tenure and interest rates per your risk tolerance. Hopefully, this article was helpful. Do share your inputs with us if you have any. Thank you for reading.
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