You built something that matters: a funeral home that families in your community trust with the hardest days of their lives. Now you’re thinking about what comes next. Maybe a second location in a nearby town. Or a new building that finally fits the way you serve families today. Perhaps a crematorium so that families can stay with the team they know for every service.
Whatever growth looks like to you, the question underneath it is usually the same: how do I fund this next chapter while keeping my current business strong?
That’s exactly where SBA expansion loans shine. We sat down with Dr. Schwanda Flowers, one of our SBA lenders at First Financial Bank, to talk through how these loans work for funeral home and death care business owners ready to grow.
What does a growth conversation sound like?
“It varies,” she says. When owners call Schwanda about growing, the conversations take a few different shapes. “You might have a funeral director who is looking to acquire a business for the first time. Current owners wanting to expand to a second or third location. Or current owners looking for real estate to build a new facility, or to upgrade and expand their current property.”
If you’re a first-time buyer, we’ve covered that ground before in our guide to using an SBA loan to buy a business and our look at why SBA financing makes sense for funeral homes and cemeteries. This is for the owners who already run a successful funeral home and want to build on it.
Here’s the good news: if you already own a healthy business, you’re walking into the lending conversation with an advantage.
Your existing business is your biggest asset.
The single biggest difference between financing your first funeral home and financing an expansion comes down to equity.
“The biggest difference is that we can use the equity in their current business instead of the cash injection of 10% that is required for a first-time acquisition,” Schwanda explains.
This changes the math on everything. A first-time buyer typically needs to bring a 10% equity injection to the table in cash. An established owner may be able to satisfy that requirement with the value already sitting inside their business. In some cases, that means expanding with a 0% down SBA loan, keeping your cash where it belongs: running your business.
It’s not automatic. “We will examine the value of the business to verify it can satisfy the required equity injection,” Schwanda notes. Your lender will look at what your funeral home is worth and confirm it covers what the SBA requires. If you want to go deeper, see our SBA collateral FAQs cover how deals can sometimes be structured down to 0% out of pocket.
Experience helps in another way, too. “Experience is a positive when making lending decisions so that a successful current owner will have an advantage,” Schwanda says. Lenders aren’t just financing a building or a piece of equipment. They’re financing your track record. Years of steady service in your community tell a story that no projection spreadsheet can.
Now let’s walk through the three most common growth paths.
Path one: building a new facility
Sometimes growth means ground-up construction. A new facility designed around how families gather today, with the reception space, parking, and flexibility to serve them the way you’ve always envisioned.
SBA financing covers new construction, but the preparation looks a little different than an acquisition. “We will need a contractor bid for the construction with cost,” Schwanda says. “The business cash flow will be evaluated, along with a business plan and financial projections to support the expansion.”
A real bid with real numbers is the starting point. From there, your lender evaluates whether your current operation generates the cash flow to carry the project, and your business plan makes the case for why the new facility strengthens the business. If you haven’t built out projections before, our guide to making a small business budget that works is a solid place to start thinking through the numbers.
Path two: acquiring a second or third location
For many owners, the fastest way to grow is buying a funeral home that already exists. The families are there. The staff is there. The at-need and pre-need business is there. What changes is the name on the deed.
This is where your experience really pays off. When you bought your first location, the lender may have had to bet on your potential. When you’re buying your second or third, they can look at your results. A well-run existing operation demonstrates you know how to serve families, manage staff, and keep the books healthy. That successful track record, as Schwanda points out, works in your favor throughout the lending decision.
Your existing equity can stand in for the cash injection. You can acquire an additional location while keeping your reserves intact and ready to work.
