Limousine Company Loans
The limousine, and overall transportation industry (which includes taxis, buses, and so forth) took major hits during the 2008 recession, and even well into 2010, profits were still down. This led to an overwhelming amount of limousine businesses either closing or having to find alternative, creative methods to generate revenues. Luckily, the economy has rebounded, leading to an increase in consumer disposable income, personal and business traveling, and rising consumer confidence. What this means for the limousine industry is improved customer spending on luxury transportation services.
As of 2015, the limousine industry employed over 78,000 people within over 130,000 luxury limousine businesses being created. This has led to a $4 billion transportation industry sector, which is 11.5 percent higher than the gross revenue profits from 2013. As the limousine industry continues to grow to accommodate the rapid population growth in the United States, profits are expected to continue to fare well. Unfortunately, mobile based apps that cater to alternative, inexpensive ride sharing options have drastically affected the limousine industry. For the limousine business industry, finding niche areas to compete against companies like Uber and Lyft are vital.
Expected Trends for the Limousine Industry
Even though the limousine industry is finally bouncing back, there are still many trends that are drastically affecting the way business is conducted. There are also major uphill battles that are plaguing the limousine industry, especially in terms of alternative mobile based ride sharing apps like Uber and Lyft. On top of that, the limousine industry is incredibly diverse and competitive, leading to many smaller limousine businesses struggling to compete and stay afloat. In order to remain competitive in the limousine industry, here are the key trends that limousine business owners need to be paying attention to:
- Superior Customer Service: In a day and age where consumers can look up third party reviews on a company in under thirty seconds, exceptional, quality customer service should be a top priority for all limousine businesses. Since the limousine industry is a service industry, choosing quality workers that are trained well and are willing to accommodate consumer preferences is vital – in an instant, a customer can post a negative review that can drastically effect business profits and customer likeability.
- Finding a Niche Area to Fix Profit Loss Areas: Ride sharing apps like Uber and Lyft have revolutionized the chauffeuring industry, and has greatly impacted a variety of limousine companies. Most mom and pop limousine businesses in particular have taken big hits thanks to these new inexpensive ridesharing businesses. Taking a lesson from large limousine businesses will be the best option for smaller limousine companies – but what are the larger limousine businesses doing? All they can do is find ways to fill the profit loss gaps through innovative and niche areas. Some limousine businesses are starting to offer brewery tours, offering large groups great pricing deals and a safe alternative to drunk driving. Other limousine businesses are altering their prices to compete with Uber and Lyft. All the rest are finding other untapped niche areas such as branching out into other transportation industry sectors like shuttle services.
- Regulatory Issues: For most limousine businesses, the biggest issue being faced today are the variety of federal, state, and local transportation regulations; these regulatory issues are only second to ridiculously high insurance rates. Some of the most common regulatory burdens for the limousine industry include: licensing requirements and fees, fleet regulations, regulations for disabled access, driver training programs, and so forth. Making sure to stay up to date with all local and federal regulations is key to staying successful with compliance.
- Technology Adoption: Overall, the limousine industry has been incredibly slow to adopt vital technologies that will help business, particularly in the mobile app and social media fields. Alternatively, limousine businesses have adopted technologies such as cloud based services fairly quick that have led to easier daily business processes.
- Mobile App Based Rideshare Services: Uber has started to dominate every type of driving and chauffeuring industry in the United States today, leading to a loss in profits for many limousine companies. Surprisingly, surveys have shown that around 80 percent of limousine companies do not have a mobile app. Of the other 20 percent of limousine companies that do have a mobile app, only 68 percent of those limousine businesses offer on demand or real time reservations. This is quite shocking, not only because mobile based apps for ridesharing have become a consumer preference, but also because specialized mobile apps for any type of business have become essential. One of the most important ways a limousine company can increase profitability and their customer base is through the creation of a specialized mobile application; and if the business can manage it, adding real time reservations as an option will only help to compete against booming companies like Uber.
Social Media: From information in the same limousine industry survey listed above, let us review some interesting statistics:
- 14 percent of the limousine businesses in the study do not even have a Facebook page. Of the other 86 percent of limousine businesses that do have a Facebook page, only 14 percent post something at least once a day – and around 13 percent never post anything on their Facebook page.
- 36 percent of those same limousine businesses do not have a Twitter account, and only 10 percent post a tweet once a day.
- Of these limousine companies that do have some type of social media account, about 54 percent of those accounts are managed by the owner or operator when he or she has the time.
- When it comes to social media monitoring and/or measurement tools, only 36 percent of those limousine businesses use some form of analytics to gauge their social media impact.
- What this means for limousine businesses everywhere is that social media has not become an integral part of the business practices, which is a huge mistake for any business in any industry. Social media is the most effective way to market, with strong content marketing, to any type of consumer.
Business Loan Uses For Limo Services
- Payroll: From time-to-time a limo service may find themselves short of cash to pay for their workers. Making sure worker payroll is funded on time is of utmost importance if they want to retain the best workers.
- Equipment: Your customers want to ride in the best vehicles available, with as many amenities as possible. Making sure your vehicles are up-to-date is very important. Should one of your vehicles breakdown, you may need financing to help get the equipment repaired. Or maybe you’re just looking to expand your fleet and need a business loan.
- Expenses: there are a number of other business expenses that may require a limo or car service to seek financing, including general operating capital, paying taxes, paying for licenses, etc..
Comparing Limousine Service Business Loans
|Bank||6-10%||3-7 years||14-30 days|
|Line of Credit||5-15%||1 – 3 years||7-30 days|
|Alternative||6-25%||1-5 years||5-7 days|
|Cash Advance||1.16-1.55||3-24 months||1-3 days|
Limousine & Car Service Bank Loans
Your standard business loans provided by bank and other conventional lenders. Limousine companies need to have good credit and quality revenue to get approved for a bank loan
- Rates: 5-10%
- Terms: 1-10 years
Documents required by banks for limousine company loans:
- Tax returns
- Income statements
- Balance sheets
- List of business debt
Alternative Limousine Service Loans
Alternative limousine and car service loans are the ideal financing options for those that have decent credit but couldn’t get approved from a bank lender. A big benefit for of alternative business lending is that is funds very fast, and doesn’t require the credit and business revenues a bank requires.
- Rates: 8-25%
- Terms: 1-5 years
To get approved for alternative limousine service lending you will need:
- Tax returns
- Bank statements
Limousine Service Cash Advance
For limo, taxi or cab services that aren’t able to get a more traditional business loan, getting a merchant cash advance may be the best and only option to get business financing. A cash advance works by providing the limo service with upfront financing through the sale of their future revenues that come through their bank or credit card processing accounts.
- Factor rates: 1.16-1.50
- Terms: 4-24 months
Documents Limo Companies need for a cash advance:
- Bank statements
- Credit card statements