HVAC, Business Tips

Top HVAC Business Loans for Contractors

Joanne Bratton
November 23rd, 2021
7 Min Read

Growing an HVAC business not only requires delivering first-rate HVAC service to customers, but also maintaining a healthy bottom line.  

Considering nearly half of small businesses last only five years, according to the Small Business Administration, managing cash flow and generating profit are key to survival. For HVAC contractors, HVAC business financing provides options to boost cash flow and supply extra funds for buying equipment, pursuing training and certifications, or conducting seasonal marketing campaigns to increase revenue.

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While it's important for your HVAC installation and repair company to build a solid financial foundation to operate profitably, strategic planning and identifying additional sources offering financing can go a long way toward business growth. As with any financial decision, consider the pros and cons of financing options from HVAC financing companies, so you can drive your company forward. 

HVAC business loans and financing options include:

  • Business credit cards

  • Equipment financing

  • Business lines of credit

  • Small business term loans

  • SBA-guaranteed loans

  • Microloans

  • Working capital loans

Where do I find HVAC financing companies?

When it comes to HVAC financing for contractors, loan options vary depending on the type of loan or financing, and lender. Once you've decided on the loan amount and the type of financing that best meets your needs, look for HVAC financing companies locally or online. Research companies with positive online reviews and get word-of-mouth referrals from those you trust.

As a borrower, it's important to delve into the details of loan terms from multiple lenders before beginning any application process. This includes comparison of interest rates, repayment terms, collateral or guarantees, origination fees, and any other upfront costs.

Once you're ready to fill out a loan application, you'll need your company financials at the ready. This includes your company's balance sheet, income statement, and recent tax and bank statements. The lender examines your business credit score and financials to determine whether you qualify.

Business credit cards

Similar to homeowners using credit to pay for home improvement projects, businesses can use credit cards to boost their HVAC company's buying power. While the annual percentage rate (APR) could be higher than a personal credit card, many companies offer a 0% introductory rate. Initial credit limits vary based on income, credit history, and credit score, but many business credit cards offer minimum starting limits anywhere between $5,000 to $25,000. Depending on card features, you could also receive rewards or cashback bonuses.

Keep in mind that your personal good credit (or bad credit) could affect your business credit card approval. A 2020 Small Business Credit Survey by the Federal Reserve Bank shows 88% of small businesses relied on an owner's personal credit score to secure financing. By opening a business credit card and making timely monthly payments, you can establish and strengthen your business credit store.

Equipment financing

For HVAC companies, HVAC system equipment and materials--including air quality and energy efficiency systems--comprise a significant portion of the budget, even more so as manufacturers announce equipment price increases.

Some lenders offer loans for HVAC companies to purchase equipment or machinery. These function as a typical loan, with the borrower making payments on interest and principal over a period of time.

Another HVAC equipment financing option includes equipment leasing, which may be a viable option if a company needs the equipment for a short time period. (This isn't to be confused with residential HVAC financing companies that offer financing, such as financing programs or payment plans, to homeowners to purchase a new a/c unit or new heating system.)  If a company needs the equipment for a longer time, it may make more sense to purchase the equipment.

Business lines of credit

A business line of credit (LOC) works in a similar fashion to home equity lines of credit. Like a credit card, business lines of credit allow a business to withdraw from an available pool of funds.

Lenders set a credit limit, which doesn't incur interest until you withdraw money. A LOC offers flexibility because you can use as little or as much as needed, make payments, and continue using your line of credit. A LOC may offer a lower interest rate than a credit card.

To obtain a business line of credit, a company must meet lender requirements regarding annual revenue, credit score, and number of years in business. Requirements and maximum limits differ, depending on whether you seek an unsecured line of credit, which does not require collateral, or a secured business line of credit, which requires collateral.

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Small-business term loans

An HVAC loan may be most often associated with an HVAC business startup or buying an HVAC business for sale, but such loans also could be used for business expansion, debt refinancing, or other business investment.

Air conditioning companies can apply for small-business loans from a myriad of lenders, including locally owned banks, nationwide financial institutions, and online lenders. 

Similar to a personal loan or a home improvement loan, a small-business loan enables a company to borrow a certain amount and pay interest and principal back within a set timeframe. Business term loans can be short-term, intermediate-term, or long-term, depending on your business's needs. Understand all loan terms and payment options, so you can make the best decision.

SBA-guaranteed loans

While the SBA doesn't lend money directly to small business owners, it sets guidelines and works with approved lenders and organizations to provide small-business loans. Since the SBA backs the loans, it reduces risk for the lenders and makes it easier for small businesses to obtain funding.

SBA-guaranteed loans range from small to large and include 7(a) loans and 504 loans. The loans offer rates comparable to non-guaranteed loans, and can be used for a variety of purposes. Eligibility and repayment terms vary depending on the type of loan.


Microloans, or small loans, allow small businesses to obtain up to $50,000 for startup, expansion, or other needs. The average microloan totals $13,000, according to the U.S. Small Business Administration.

Microloans are available through nonprofit, community-based organizations experienced in lending and business management assistance, according to the SBA. Interest rates and repayment terms vary depending on the lender, but most require some type of collateral and personal guarantee of the business owner.

Working capital loans

Business owners use working capital loans to finance day-to-day costs, not long-term investments. These short-term loans can cover payroll, inventory, or other operational needs during seasonal dips in HVAC revenue, such as during fall or spring.

Businesses often do not need to put up collateral for working capital loans, but the loans typically have higher interest rates and feature short repayment terms. They can also be tied to business owners’ personal credit, which could affect their credit score.

Optimize HVAC operations

No matter what HVAC company financing option meets your company's needs, streamline your HVAC company's daily operations to manage cash flow more effectively.

ServiceTitan HVAC Software enables your company to monitor real-time accounting data from anywhere. Close the payment gap with convenient payment options, so customers can see the pricing breakdown and pay for their new air conditioner or heat pump right after installation. Enhance your HVAC company's processes, and in turn, boost your company’s bottom line.

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