6 Financing Mistakes Service Business Owners Must Avoid

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With small-to-medium size businesses (SMBs) struggling to reduce operating costs and plan for unforeseen expenses, American entrepreneurs—including countless home service business owners—are already starting off at a disadvantage. According to the American Dream Gap Report, roughly 20% of SMBs have considered closing their doors. That’s a huge chunk of our economy. Why is this happening? Well, the two leading factors come down to lack of growth and cash flow problems.

On top of that, many SMBs aren’t able to secure the funding required to run their enterprise. Business owners’ dreams of expansion are stifled by the lack of access to affordable capital.

  • 45% of small business owners who are denied financing get turned down more than once and 23% don’t know why their applications were denied.
  • 23% of small business owners don't know why they were denied
  • 26% avoided hiring and expansion because they're frustrated with trying to access funds


The myriad of SMB financing options can feel like a maze at best. Whether you’re starting a business, scaling one, or even just trying to sustain it, your ability to fund the endeavor will make or break your success.

Instead of feeling discouraged, empower yourself by becoming well-informed of your options and avoid these six common mistakes when trying to raise capital:

  1. Don’t deplete your personal assets — Savings accounts, mortgage equity, and 401(k)s can be tempting wells to tap into. But when personal resources are drained too low, it can spell out danger for you and your family. Even though it's important for lenders to see that you are willing to “put some skin in the game”, don’t let it bleed you dry. Define a clear line between personal and business dollars, so your risk is appropriately calculated.
  2. Don't forget to have a plan — Will you use the money for inventory? Payroll? Expansion? Be sure to have a business plan in place so that you have an understanding of how much you really need to borrow. Identify your operating and/or expansion costs, then add a little $$$ cushion... because they always cost more than you think. Without a plan, you could end up under or overfunded, and both have their own set of ramifications.
  3. Don’t max out your credit cards — While it can be tempting to earn those airline miles, credit card rates can skyrocket after the introductory rates expire, leaving you with significant debt. Don’t spend more on your credit card than what you know you can comfortably pay off in-full at your next billing cycle. This will help you avoid a growing stockpile of debt that feeds off of exorbitant APRs.
  4.  Don’t risk your personal relationships — The financial generosity or backing of friends and family should not be your go-to funding source, as tempting and unabiding as it may seem. But if your loan does come from family or friends, don’t forget to legally document and schedule payments to formalize your partnership, so you can avoid any awkwardness or disappointment. Define the type of funding they are contributing. Is it a donation? A long-term investment? Personal loan? Make it clear because there’s a big difference.

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  5. Don’t ignore your credit score — Did you know you have two credits scores? There’s your personal credit score, and then there’s your business credit score. And a lender may check both as part of the funding application—depending on what stage your business is in. This establishes your trustworthiness and gives the lender some insight into how much of a risk you represent to them. 82% of SMBs don’t know how to interpret their business credit score, which directly interferes with their ability to grow or scale. So make sure you take the time to understand your credit report and ensure its accuracy.
  6. Don’t wait for surprises — The amount of capital you need to run your business every month is referred to as your “net burn rate.” Review your monthly cash flow report for a historical and seasonal perspective. This will show your business’ sales and expenditures over time. Make sure you use a discerning eye when reviewing money-in, money-out, so you don’t get blindsided by miscellaneous operating expenses. Otherwise, you may find yourself “in the red” by the time you discover your company needs more capital.

Working Capital Financing with Full Transparency 

When considering financing options for your home service business, you want a lender who champions entrepreneurs and makes it easy to understand the process. That’s why ServiceTitan has partnered with BlueVine, a leading online provider of working capital financing for SMBs. 

BlueVine offers comprehensive financing solutions that make it fast, simple, and transparent, so business owners, like you, can spend time growing their business—not just trying to manage cash flow. BlueVine gives you access to preferred rates on fast and flexible financing up to $250,000. You may even qualify after being in business for just 6 months—versus 2+ years required by most banks. 

And the best part? The application takes 2 minutes and approvals are as fast as 5 minutes—and it happens all online with just a few clicks. Plus, businesses who have already chosen BlueVine as their lender have been able to access the capital they needed to build, grow, and expand on their own terms.

“We’re a new business, so we didn't meet the two-year requirement for other financing sources. But applying with BlueVine online was quick, easy, and we got funded within 24 hours. We’ve already used the money to buy a new truck and expand our service area. It really helps to know the line of credit is there to give us breathing room.”

-Ashley Fitzpatrick, Fast Flow Plumbing, LLC

ServiceTitan’s partnership with BlueVine is just another example of ServiceTitan’s commitment to the longevity and prosperity of home service companies across the country. BlueVine enables emerging enterprises to achieve the extraordinary. 

Discover how you can grow your business with BlueVine today. 


ServiceTitan is a comprehensive software solution built specifically to help home service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us. 

Ready to learn more about what ServiceTitan can do for your business? 

Contact our team to schedule a demo today.

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