4 Essential Things to Know Before Applying for an HVAC Business Loan

We talk a lot about offering financing to your HVAC customers. But what if you need financing for your business?

Securing the right financing can be a game-changer in growing your HVAC business. However, navigating the business loan landscape can be challenging — whether it’s figuring out what type of loan you need or finding the right lender. To make things easier, our business lending partner, Loanspark, has provided expert insights into how to position your business for success when applying for a business loan.

1. What is the biggest misconception when applying for a business loan?

Many business owners believe that loans are only for times of financial distress. However, the best time to apply is when your HVAC business is financially stable. Applying for a business loan when your business finances are strong provides more options and better terms, such as lower interest rates.

Business loans are most effective when used strategically — whether for expanding your business, buying new equipment, or strengthening working capital. To maximize your approval chances, consider applying:

• Before you need a loan, so you have time to evaluate your options.
• Before making large investments, such as equipment purchases or expansions.
• During peak season, when cash flow is strong.
• After you’ve compiled up-to-date financial records, like tax returns and bank statements.

By planning ahead, you can position yourself for better financing options and long-term success.

2. What is the biggest mistake HVAC contractors make when applying for a business loan?

The biggest mistake an HVAC contractor can make is waiting until the last minute to explore financing options. Applying during a financial emergency can limit your loan options, lead to less favorable terms, or even result in denied loan applications.

Other mistakes include:

• Missing financial documentation: Missing or outdated records, such as tax returns or bank statements, can delay approval or disqualify an application.
• Mixing personal and business finances: Maintain a dedicated business bank account to present clear financial records.
• Changing business ownership or structure during the application process: This raises concerns with lenders and complicates approval.
• Overlooking the importance of credit score and revenue: Understanding your financial standing, including your FICO score and monthly revenue, strengthens your chances of approval.

Proactively addressing these factors can make the loan process faster and help you get the best financing terms.

3. What can contractors do to speed up the loan process?

To expedite loan approval, follow these key steps:

• Gather all necessary financial documents upfront: Most lenders require at least 6 months of bank statements. For loans over $100,000, tax returns and income (or profit and loss) statements are often needed.
• Make sure your business is in good standing: Confirm with the Secretary of State that your business is registered and compliant.
• Keep ownership documents up-to-date: Ensure all current business owners are correctly listed.
• Maintain a dedicated business bank account: Avoid using personal accounts for business transactions.
• Apply at the right time: Strong cash flow and steady revenue improve your approval chances.

Loanspark simplifies this process by offering a single, streamlined application and access to a large network of lenders — eliminating the need to shop around.

4. If there is more than one company owner, who should apply?

One owner with at least 51% ownership is typically enough to apply for a business loan. However, we highly recommend that all owners apply together.

When all owners apply together, you’ll have a stronger financial profile for lenders to evaluate. Lenders may request information from all owners, anyway, so it’s best to get ahead.

Loanspark guides you through this process to ensure it’s smooth and efficient. They’ll also make sure you have all the documentation needed to avoid financing delays.

Final Thoughts

Applying for a business loan doesn’t have to be an overwhelming experience. By understanding when and how to apply, avoiding common mistakes, and preparing the right documentation, you can unlock new growth opportunities.