HVAC, plumbing and electrical business loans

Which loans work best for HVAC, plumbing and electrical contractors?

Commercial vehicle loans work best for service vans and trucks, because the vehicle is the collateral and lenders know how to value it. Equipment financing works best for recovery machines, pipe cameras, trenchers, lifts and fleet upfits. A line of credit works best for buying equipment ahead of the season and carrying payroll on commercial jobs that pay in 45 to 60 days. SBA 7(a) works best for buying a competitor or a retiring owner's company.

• Vehicle loans: 3 to 6 years, 0% to 15% down, 7% to 18% APR.
• Equipment: 2 to 7 years, 7% to 20% APR.
• Lines of credit: $25,000 to $500,000, 8% to 30% APR.

What do lenders like and dislike about the trades?

Lenders like licensed owners, recurring maintenance agreements, a mix of residential service and commercial contracts, strong gross margins on service work, and a fleet they can count. They like that trade businesses sell for real money, which means the loan is backed by a business someone else would buy.

They dislike HVAC seasonality, where spring and fall revenue dips can produce negative balance days, slow paying commercial general contractors, warranty exposure on installs, and owners who still do every job themselves. Factoring companies avoid residential receivables because homeowners pay at the door. Stacked advances taken to get through a slow spring are the most common reason a trade business cannot get a bank line later.

How much can a trade contractor borrow?

Vehicle and equipment lenders fund the invoice, typically $40,000 to $80,000 per upfitted van and $10,000 to $150,000 for equipment. Online working capital lenders advance 50% to 100% of one month of deposits, so a contractor depositing $120,000 a month usually sees $60,000 to $120,000. Bank lines are sized at 70% to 80% of commercial receivables under 90 days plus a working capital allowance. SBA 7(a) acquisition loans are sized by the target's cash flow and often run $500,000 to $3 million for a trade business with a few trucks and a service agreement base. Check what your cash flow carries with the DSCR calculator.

What documents will you be asked for?

Trade lenders ask for the standard package plus proof you are licensed and insured:

• State or local trade license and liability and workers compensation certificates
• 3 to 6 months of bank statements for online products, two years of tax returns and financial statements for banks and SBA
• Vehicle and equipment quotes with specifications
• Accounts receivable aging split between residential and commercial
• A count of active maintenance agreements and their annual value
• A fleet list with year, make, model and liens
• The purchase agreement and the seller's financials for an acquisition

The document checklist covers the rest.

What are the common uses of funds?

Trade loans typically pay for one of these.

• Adding trucks: three upfitted vans at $65,000 each financed over five years so new technicians can run calls.
• Seasonal inventory: a $100,000 line draw in March to stock condensers and furnaces before the peak.
• Hiring technicians ahead of demand: see hiring and payroll.
• Buying a competitor: an SBA 7(a) loan for a $1.5 million acquisition of a plumbing company with 3,000 customers.
• Carrying commercial jobs: factoring a $90,000 invoice from a general contractor that pays in 60 days.
• Software and dispatch systems: a small term loan or business credit card.

What usually gets a trade contractor declined?

The most common reason is a missing or lapsed license, which almost every lender checks. After that it is negative balance days during the slow season, existing advances, and a business under a year old. Banks decline on losses after owner salary, receivables mostly past 90 days, and an owner credit score under about 650. Acquisition declines usually come from a price the target's cash flow cannot support, or a seller who is the only licensed master and plans to leave immediately. Insurance lapses and open workers compensation claims also stop loans. Why loans get denied explains the fixes.

How to apply

Apply once here with your license, bank statements and vehicle or equipment quotes, and your application reaches vehicle, equipment, line of credit and SBA lenders together. Or connect your AI assistant to our MCP server through the agents hub and let it read your statements, fill the application and submit it. It is free to the business, and offers come back to the same place for comparison.