What are business acquisition loans

Business acquisition loans are small business loans that are provided to business owners who are assuming ownership of a pre-existing business model. It helps in purchasing the business from the seller, transfer leasing agreements, attend to property renovations, and update or repair equipment.

How do you qualify for business acquisition loans?

Qualifying for business acquisition loans can be challenging as banks are often suspicious when a company sells. In addition to proving good business finances, you must also demonstrate clean personal finances including your credit history, annual income, and history of paid and unpaid debts.

What are the alternative ways to finance a business acquisition?

Alternative ways to finance a business acquisition include SBA loans and financing through the seller. SBA loans provide government-backed loans, while financing through the seller often comes with higher interest rates than bank loans.

Loans for HVAC Heating and Cooling Businesses

2015-04-29

Minyang Jiang

Updated September 10, 2022

Starting a new HVAC business? Already in operation, but need a little financial help to cover surprise expenses?

You’re not alone. Every small business owner needs a little help in the funding department on occasion, but sometimes relying on the bank is not in your best interests. The good news is that there are plenty of alternative small business capital available for financing heating and cooling businesses.

Why a Loan for HVAC Heating and Cooling Business is Often Needed?

Starting a New HVAC Company

Getting any business started from the ground up takes work – and money. Not having the necessary funds available shouldn’t stand in your way from pursuing your business goals. While sufficient funds might not be available in your bank account, they are available through various alternative loan options. If you’ve got a dream to start your own HVAC company, different small business loan products can help.

Expanding Your Growing Business

What if a fantastic opportunity comes your way that you have to capitalize on immediately to reap its rewards? What if you don’t have the funds available to take advantage of it? A quick loan can give you the cash needed to seize these opportunities to help you grow and expand your business.

Making Key Investments In Technology To Stay Competitive

To remain competitive in the HVAC field, you’ve got to keep up with technology. Investing in innovation is always important for HVAC companies in order to give your services the edge to stay on top of the game. But technology requires money. Luckily, this money can be accessed through various financing programs.

There are plenty more scenarios where extra cash is needed. With alternative loan options that make access to cash quick and simple, small business financing shouldn’t have to be a problem.

Alternatives to Loan Options for Your HVAC Heating and Cooling Business

Instead of gambling on the bank, there are other funding solutions for HVAC heating and cooling business owners to take advantage of. Let’s have a look at a few.

Micro Loans

As the name would suggest, a micro loan is a small loan that HVAC business owners can use to help get a business up and running. These loans differ from traditional bank loans in that they are usually given in much smaller amounts, and aren’t typically dependent on collateral or credit.

Microloans are often designed for those who may have a harder time getting approved for a loan compared to others. Minorities, women, young entrepreneurs and low-income entrepreneurs are examples of such groups who would find micro loans particularly easy to gain access to compared to other financing options. The loan process generally includes some form of business coaching to help the entrepreneur boost his or her chances for profitability and success.

Business Line of Credit

HVAC entrepreneurs would benefit greatly from having a business line of credit available even before a loan is needed. A line of credit works similarly to a credit card: a fixed amount of money is available to be drawn from at any time, with only the portion withdrawn being subject to interest charges. Any amount of money up to the fixed limit can be borrowed at any time. After the money is paid back, the money can be withdrawn again and again as long as the limit is never surpassed.

This option allows extra funds to be available to improve your cash flow while avoiding the higher cost of term loans for short-term expenses. However, lines of credit are not ideal to cover longer-term expenses that will take months or even years to pay off because it ties up these funds for that period of time. Instead, a term loan should be looked at in this scenario.

Working Capital Loan

A working capital loan is designed to meet a business’s short-term financing needs. These can be versatile financial tools to help manage cash flow and cover unexpected expenses that might come along. Working capital loans work like traditional term loans where a certain amount of money is given upfront, and is then paid back, along with the lender’s fees. However, loan amounts with these short term loans are usually smaller, and the repayment period is much shorter compared to typical term loans.

This is a great option for HVAC entrepreneurs who need to cover expenses but don’t want the debt to be on their record for long. However, it’s important to note that the interest rates attached to such loans could be high.

Equipment Financing

Just about every business – including HVAC businesses – need a certain amount of equipment to operate. But such equipment costs money, which you may or may not have enough of. If funds are too short to stock up on the necessary tools you need to run your HVAC business, equipment financing could be a great option for you.

With this type of financing option, the equipment itself acts as collateral to secure the loan. Equipment financing programs are typically made at fixed interest rates and offer fixed term lengths, making the monthly payments the same from one month to the next. This is a great alternative to leasing the equipment, since you own the equipment after the loan has been paid off.

Get on Financial Track With Help From Credibly

At Credibly, we understand that navigating the murky waters of funding options can be tough. We can educate you on all the options available to you, and help you determine which one makes the perfect fit. For modern funding solutions for your HVAC business, contact Credibly today!