So, you’ve decided to purchase another funeral home – or maybe your very first. Congratulations! The next important step is finding a lender to support you and your dream.

You could work with a local bank or the U.S. Small Business Association (SBA). They’re well-known options and can lend money.

However, they often come with hidden costs, lengthy approval times, and a lack of industry-specific expertise–factors that can significantly impact your business’s success and ability to secure a loan.

So, what lender should you choose as a partner?

Keep reading to discover 10 qualities to look for.

1. Funeral Industry Expertise

Local banks typically do not specialize in funeral home financing. Their lack of experience means they treat funeral homes like any other small business and apply generic lending criteria that may not align with your business’s financial model.

On the other hand, a lender with experience in the funeral profession understands your funeral home’s unique challenges and cash flow structure. They can provide you with tailored financial solutions, making it easier to secure the right loan for your funeral home.

2. Low Costs and No Origination Fees

One of the biggest drawbacks of local bank or SBA loans is the cost. These loans often include origination fees ranging from 0.5% to 1%, plus additional SBA fees. Over the life of a loan, these costs can add up significantly, cutting into your funeral home’s profitability.

You shouldn’t have to worry about additional fees. With the right lending partner, you can save money upfront and reinvest those funds in your business where they matter most.

3. Fixed Interest Rates

Banks and SBA lenders typically offer variable interest rates, meaning your monthly payment could increase over time. This can create financial uncertainty if you need stable cash flow.

You should look for a lender that provides a 5-year fixed interest rate to ensure predictable and manageable payouts. With a fixed rate, you can confidently plan your finances without worrying about rising interest costs.

4. Fast Closing Times

Time is money. Waiting 3-6 months for a loan to close through a local bank or SBA lender can delay important business decisions and expansion plans. Plus, if the bank uses an SBA-backed loan, you’re looking at an even lengthier process with more red tape.

You deserve quick turnaround times so you can hit your goals. The right lending partner can help you close on a loan in as little as 30-45 days so you can keep your project moving.

5. High Loan-to-Value (LTV) Ratios

Local banks and SBA lenders generally cap LTV ratios at 75-80%, which requires borrowers to contribute more of their own capital to finance their business.

It’s important to choose a lender who offers LTV ratios of up to 90%. That way, you can secure a larger loan with less out-of-pocket investment.

6. No Lending Limits

SBA loans have a $5 million cap, which can be restrictive for larger funeral home acquisitions or multiple-location businesses.

You should find a lender without lending limits to ensure you have access to the full amount of financing you need, whether you’re expanding, refinancing, or acquiring a new location.

7. No Prepayment Penalties

Local bank and SBA loans often include prepayment penalties, which means you may incur additional costs for paying off your loan early.

You should be able to pay off your loan on your terms without additional fees. Look for a lending partner that doesn’t charge prepayment penalties.

8. Low Personal Capital Requirements

Banks often require high personal capital contributions, making it more difficult for you to secure financing without contributing significant personal assets.

Your lender’s loan program should be more accessible and have lower capital requirements. That way, it’s easier for you to qualify for a loan and grow your business.

9. Loan Servicing and Ongoing Support

Local banks often outsource their loan servicing, which can create hurdles in communication and lead to confusion and frustration.

On the other hand, a lender with in-house loan servicing can provide direct, personalized support from a team that understands your business. Plus, who doesn’t love receiving support from a live person who answers every phone call and email?

10. Expert Guidance

While banks can give you a loan, they can’t offer industry-specific expertise. Some local banks even rely on SBA-backed loans to mitigate their risk, indicating they potentially don’t understand the value of your business and could see the loan as a risky move.

One of the most valuable qualities to look for in a lender is the ability to provide expert guidance through every step and assess risks along the way. From structuring loans to navigating industry-specific challenges, your lender should be a true partner in your funeral home’s financial success.

The Lending Partner for You

Instead of struggling with a local bank or SBA lender who doesn’t understand your business, work with a team that truly knows the funeral profession and is committed to helping your funeral home thrive.

Choose Funeral Directors Life.

With us, you get:

Industry Expertise – We understand funeral homes.

Lower Costs – We have no origination or SBA fees.

Fixed Rates – Avoid uncertainty with a stable 5-year fixed rate.

Faster Closings – Get funding in as little as 30-45 days.

Higher Loan Amounts – Get up to 90% LTV with no lending limits.

No Prepayment Penalties – Pay your loan off early without extra fees.

Dedicated Loan Team – Receive personalized loan servicing and ongoing support.

Guidance & Strategic Support – Experience more than just financing—get expert guidance.

Interested in learning more?

Contact the Funeral Directors Life Loan Team today to discuss your financing needs!