How to Finance a Commercial Landscaping Business

A common problem for commercial landscapers in Canada is that corporate customers usually pay invoices in 30 to 60 days. As a landscaper, you have to provide terms to your clients if you want to win their business. However, providing payment terms can expose you to these potential financial problems:

  • Credit risk – by offering payment terms, you run the risk that your client will not pay you. You will remain liable for all the expenses of providing the landscaping but will not get paid for it.
  • Cash flow risk – few small companies can afford to wait up to 60 days to get paid.

To succeed in the landscaping industry, you must be able to manage both of these risks.

Should you offer credit?

You should offer credit terms only to deserving clients: basically, clients who will pay you back. Determining if a client is worthy of net-30 terms is relatively simple, especially for low- and medium-value transactions. One common strategy is to ask for references and then call the references to verify payment habits. While helpful, this approach doesn’t always provide reliable information.

A better strategy is to get commercial credit reports on your clients. These reports are widely available, are relatively inexpensive, and provide accurate information.

Understanding cash flow risk

Offering payment terms can create serious cash flow problems if your company is not prepared. Essentially, you could run out of money and be unable to pay employees, nurseries, or other suppliers. It’s actually fairly easy to run out of money, especially if you are not careful. All it takes is a few late payments. However, you can easily fix this problem by using invoice factoring.

Factoring your invoices – and your business

One way to fix this problem is to factor (finance) your invoices. Construction factoring is a relatively easy process that enables you to get immediate funds for your slow-paying receivables. Unlike most conventional financing solutions, qualifying for factoring is relatively easy.

The transaction is structured as the purchase of your invoices in two instalments: the advance and the rebate. The advance covers about 80% of your invoices and is provided as soon as the landscaping project is completed. The remaining 20% is rebated as soon as your client pays on their regular schedule. Note that your client does not need to pay invoices any sooner. You can learn more by reading “How does factoring work?

Program advantages

Invoice factoring has a number of advantages and few disadvantages. A key benefit is that this solution improves your cash flow, ensuring you have enough funds to pay company expenses. Also, the line enables you to offer payment terms to clients without having to worry about negative impact on your cash flow.

If you have been turning away landscaping prospects because you could not offer terms, this program can be a game-changer. Perhaps the most important advantage is that the line can grow with your business. The line can increase as your sales grow, provided that your clients have good commercial credit. This aspect of invoice factoring makes it an ideal tool to finance small businesses that have cash flow problems due to slow-paying invoices.


The costs of an invoice factoring line are usually based on a percentage of your receivables. Most lines cost from 1.5% to 3.5% per 30 days. However, this cost varies based on the risk profile of your company.

Get a quote

We are a leading factoring company and can offer landscaping companies competitive financing terms. For information, call (877) 300 3258 or get an online factoring quote.