Owning a funeral home or cemetery is more than a business decision. For many of you, it’s a calling you’ve worked toward for years. Whether you’re dreaming of your first funeral home acquisition, planning to grow what you’ve already built, or thinking ahead to succession, there’s one thing standing between that vision and reality: capital, and knowing how to secure it the right way.
The good news? You don’t have to figure it out on your own, and you don’t have to work with a lender who’s learning this profession on the fly. That’s exactly what I dug into on the latest episode of Johnson Consulting Conversations with Andrew Kennedy, a senior loan officer at Live Oak Bank who has helped funeral professionals secure well over $100 million in financing.
Andrew has spent eight years building a career around one niche, funeral home and cemetery lending, and his perspective is essential for any owner thinking about growth, acquisition, or succession.
Funeral homes aren’t like other small businesses, and Andrew was quick to explain why. Between multiple revenue streams, pre-need trust obligations, and state-specific licensing requirements, a generalist lender often doesn’t know what to even ask, let alone how to structure a deal around the answers. Specialized lenders who already speak the language save owners time and frustration, because they’re not starting from scratch on every file.
There’s also a stability factor most owners don’t realize works in their favor. Death care demand doesn’t rise and fall with the broader economy the way retail or hospitality does. That consistency makes the business attractive to lenders, but Andrew was clear it doesn’t mean lenders expect perfection. What they’re really looking for is predictability: steady cash flow, sound management, and a good reputation in the community, evaluated over multiple years rather than a single slow quarter.
One of the most valuable parts of the conversation was Andrew’s rundown of what’s available today: SBA loans, conventional bank financing, seller financing, private equity, and often a blend of several working together. The right mix depends on where you are in your business journey and what you’re trying to accomplish.
SBA financing can sometimes be particular area of confusion. Andrew was direct in dispelling the biggest myth: SBA loans aren’t a fallback for businesses that can’t qualify elsewhere. Some of the strongest operators in the country choose SBA financing deliberately, because it offers longer repayment terms, no covenants, lower equity requirements, and the flexibility to roll acquisition costs, real estate, renovations, equipment, and working capital into a single loan. Conventional financing tends to come with tighter covenants, larger down payments, shorter amortization, and higher debt service coverage requirements, appropriate in some situations, but far less flexible for owners who want to preserve cash for growth.
He also addressed the worry that SBA loans take too long or drown owners in paperwork. The real driver of speed isn’t the SBA program itself, it’s whether your lender has preferred lender status, which allows approval, closing, and disbursement in-house rather than waiting on Washington, D.C. That status alone can shave four to eight weeks off the process.
Beyond loan structure, Andrew emphasized something owners fully control: their own financial habits. Clean funeral home bookkeeping and the ability to produce trustworthy financials quickly are, in his experience, rare. Owners who can do this consistently stand out to lenders immediately.
His closing advice boiled down to three things: cash flow is king, relationships with lenders, consultants, and accountants who understand this industry matter enormously, and above everything prepare early. The owners with the most options, Andrew noted, are the ones who know their numbers and line up trusted advisors long before a deadline hits.
Andrew laid out exactly what he wants to see before a conversation even really gets started. If you’re considering a purchase, sale, or growth capital soon, start assembling this now:
- Written goals — Know what you’re solving for: money down, interest rate, loan term, or the type of business you’re targeting. Put it on paper so it’s easy to communicate.
- Three years of business tax returns and financials — For the business being purchased, and for your existing business if you’re already an owner.
- A current profit and loss statement and balance sheet — Not last year’s numbers. Lenders want the most up-to-date picture of where things stand today.
- A debt schedule — So the lender can confirm you can manage new debt alongside what you already carry.
- A business plan — Not always required, but it signals seriousness and preparation.
- A purchase agreement or letter of intent, if one exists — Not mandatory to start the conversation, but helpful if you already have terms in place.
If you don’t have an Letter of Intent yet, that’s completely normal. Andrew noted that many buyers reach out simply to understand what their cash flow can support before they’ve identified a specific deal and that’s a perfectly reasonable place to start the conversation.
Whether you’re planning an acquisition, preparing for succession, or just want to understand your options before you need them, the message was consistent: the earlier you start talking to the right lender, the more options you’ll have. Waiting until you’re under a deadline limits your leverage and your choices.
Thank you to Andrew Kennedy for such a candid, practical conversation. If you missed the live session, the full episode and recording are available now and if you’re weighing financing for your own funeral home or cemetery, it’s worth reaching out Andrew!
Join us August 19 at 2:00 PM for the next Johnson Consulting Conversations, when I’ll be sitting down with Savannah Evanoff, Director of Social Media for Ring Ring Marketing, to talk all things social strategy for funeral homes.
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