How to Get a Loan for an HVAC Business in 5 Steps

Running a successful HVAC business requires more than just technical expertise. From purchasing service vehicles and HVAC tools to managing payroll and navigating seasonal demand, access to reliable financing is essential for long-term growth and day-to-day operations.

Fortunately, there are several loan options designed specifically for service-based businesses like HVAC contractors. Whether you’re just starting out, looking to expand your team, or covering unexpected costs, the right loan can help keep your business running smoothly.

In this guide, we’ll walk through five essential steps to help you get a loan for your HVAC business. You’ll learn how to assess your needs, explore financing types, meet eligibility criteria, and choose the right lender to support your goals.

1. Determine Your Financing Needs

Before applying for a loan, it’s important to outline exactly how much funding your HVAC business needs and what you plan to use it for. A clear understanding of your financial goals will guide you to the right loan type and help lenders assess your application more effectively.

Common Reasons for HVAC Business Loans

HVAC companies face a variety of capital needs depending on their size, location, and service offerings. Here are some of the most common uses for financing:

• Service Vehicles: Whether you’re purchasing your first work van or expanding your fleet, vehicle costs can be significant. Loans can help you buy or lease reliable transportation for your technicians.
• Tools and Equipment: HVAC businesses rely on specialized tools and diagnostic devices. Financing allows you to invest in high-quality equipment without draining your working capital.
• Inventory and Materials: Stocking air conditioners, furnaces, ductwork, and replacement parts often requires upfront investment—especially during peak seasons. A loan can help cover these expenses in advance.
• Hiring and Payroll: Adding new technicians or administrative staff? Short-term financing can help you scale your workforce without cash flow disruptions.
• Marketing and Lead Generation: If you’re entering a new market or trying to boost local visibility, funds can be used for advertising campaigns, website development, or lead management tools.
• Working Capital: Cash flow can fluctuate due to weather patterns, client payment cycles, or off-season slowdowns. Financing can help you manage day-to-day expenses between jobs.

Once you’ve defined your needs, you’ll be in a better position to select the most effective financing option.

2. Types of HVAC Business Loans

Whether you’re expanding your team, upgrading tools, or managing seasonal demand, there are several loan options available to HVAC contractors. Understanding how each loan type works will help you choose the best fit for your business needs.

Equipment Financing

Equipment financing is ideal for purchasing HVAC-specific tools, service vehicles, or other durable assets. The equipment itself often serves as collateral.

• Loan Amounts: Up to 100% of the equipment’s value
• Uses: HVAC diagnostic tools, vans, compressors, lifts, and installation equipment
• Terms: Typically 3 to 7 years, with repayment terms based on the equipment’s lifespan

SBA 7(a) Loans

SBA 7(a) loans offer low interest rates and longer repayment terms, making them a solid option for HVAC businesses looking to invest in growth.

• Loan Amounts: Up to $5 million
• Uses: Fleet expansion, hiring, marketing, or acquiring another HVAC company
• Terms: Up to 10 years for working capital or equipment; up to 25 years for real estate

Term Loans

A term loan provides a lump sum of capital repaid over a fixed period. It’s suitable for larger, one-time investments in your business.

• Loan Amounts: Varies by lender and business profile
• Uses: Office or warehouse buildouts, team expansion, software tools, or bulk inventory
• Terms: Usually 1 to 10 years, with fixed or variable interest rates

Business Line of Credit

A line of credit gives HVAC businesses flexible access to cash as needed. You only pay interest on the amount drawn, making it ideal for managing short-term or seasonal cash flow needs.

• Credit Limits: Based on revenue and credit profile
• Uses: Covering payroll, fuel, materials, or unplanned repairs
• Terms: Revolving credit with interest only on the funds used

3. Assess Your Eligibility

Lenders evaluate several factors when reviewing loan applications from HVAC businesses. Knowing what they’re looking for can help you prepare your documentation, strengthen your case, and improve your odds of approval.

Credit Score

Both personal and business credit scores play a key role. A higher score often leads to better rates and terms. While banks may require scores of 680 or higher, many alternative lenders will consider applicants with scores in the mid-600s or below, depending on the strength of the rest of your application.

Time in Business

Most lenders prefer HVAC companies with at least 1 to 2 years of operating history. If you’re a newer contractor, you may still qualify for some financing options if you can demonstrate steady income or provide a strong business plan.

Annual Revenue

Lenders want to know you generate enough income to repay the loan. Many require a minimum annual revenue threshold, typically between $100,000 and $250,000.

Cash Flow and Profitability

Strong, consistent cash flow shows lenders you can keep up with repayment even during slow seasons. Profitability also signals operational efficiency—something lenders view favorably.

Collateral (When Required)

Depending on the type of loan, you may need to pledge equipment, vehicles, or other business assets as collateral. This can improve approval chances and lead to better rates.

4. Choose the Right Lender

Once you’ve identified your financing needs and reviewed your eligibility, the next step is selecting a lender that understands the nature of HVAC businesses. From banks to online lenders, each option offers different benefits depending on your goals and timeline.

Traditional Banks

Banks typically offer low interest rates and long repayment terms, making them a good fit for established HVAC companies with strong credit. However, approval can take weeks, and the application process is often more rigorous.

Online and Alternative Lenders

Alternative lenders are a popular choice for HVAC contractors seeking faster funding or more flexible qualifications. Many offer streamlined applications, lower documentation requirements, and same-day or next-day approvals.

Industry-Focused Lenders

Some lenders, such as SBG Funding, specialize in working with service businesses like HVAC companies. These lenders may offer financing options tailored for fleet upgrades, licensing needs, or managing seasonality.

5. Gather Your Documents and Apply

After choosing your lender and loan type, it’s time to prepare your application. Submitting the right documents—and presenting them clearly—can speed up the approval process and demonstrate that your HVAC business is well-organized and financially stable.

Common Documents You’ll Need

Most lenders will ask for the following when reviewing your application:

• Business Bank Statements: Usually the most recent 3 to 6 months
• Tax Returns: Both personal and business tax returns from the past 1 to 2 years
• Profit and Loss Statement: A breakdown of your revenue and expenses to show financial performance
• Balance Sheet: A snapshot of your assets, liabilities, and equity
• Equipment Invoices or Quotes: If you’re applying for equipment financing, include pricing or specs
• Business License and Certifications: Proof that your HVAC business is licensed and in compliance with local and state requirements
• Personal Identification: A government-issued ID such as a driver’s license

Depending on the lender, you may also be asked for proof of insurance, technician rosters, or contracts with clients. Being prepared with these materials up front will help you move through the application process more efficiently.

Flexible Term Loans for HVAC Businesses from SBG Funding

Whether you’re expanding your team, upgrading service vehicles, or preparing for peak season, SBG Funding offers tailored funding for HVAC contractors. Our fast and flexible financing is built to support your business through every season.

Why Choose SBG Funding?

• Quick Approvals: Get a decision in as little as 24 hours.
• Tailored Loan Options: Use funds for tools, vehicles, staffing, inventory, or working capital.
• Transparent Terms: No hidden fees and competitive rates.

How to Apply

1. Apply Online: Complete our short application in minutes.
2. Get a Fast Decision: We’ll review your request and respond within 24 hours.
3. Receive Funding: Approved funds can be in your account as soon as the same day.

Applying won’t affect your credit score. Get the capital your HVAC business needs—without the delays.