How HVAC LOCs Compare
| Product | Limits | Rates | Draw Fees | Repayment | Speed |
|---|---|---|---|---|---|
| Bank-Backed LOC | $50k–$500k | Prime + 3–6% | 0%–2% | Monthly interest, annual cleanup | 1–3 weeks |
| Fintech LOC | $25k–$250k | 14%–32% APR | 0%–3% | Weekly or monthly draws | 24–72 hours |
| Secured Inventory LOC | $100k–$400k | 10%–20% APR | 1%–2% | Interest-only with quarterly paydown | 5–10 days |
Eligibility Checklist
- 12+ months in business with HVAC license and insurance.
- Average monthly deposits $40k+ and positive cash flow.
- Owner FICO 620+ (bank LOCs often require 680+).
- Filed business and personal tax returns for the last two years.
- Willingness to provide a borrowing base or accounts receivable aging for higher limits.
When to Use a Line of Credit
- Smoothing payroll and inventory during shoulder season.
- Fronting parts for commercial jobs with milestone payments.
- Funding ad campaigns tied to predictable close rates.
- Handling emergency repairs without tapping personal savings.
Need examples? Start with Seasonal cash swings – line of credit, MCA or factoring? and Payroll is due Friday and two big jobs haven’t paid – now what? to see how contractors actually deploy their LOC.
Case Study: Shoulder Season Buffer
NJ, 3-truck shop Opened a $120k LOC with a fintech lender at 22% APR. Drew $45k to cover eight weeks of payroll and ads, generating 28 additional service calls and 9 installs. Net after financing: +$13k.
FAQ
Do I pay interest if I’m not using the LOC?
No, you only pay interest on the amount you draw. Some lenders charge an annual fee or inactivity fee—ask up front.
Can I secure a LOC with accounts receivable?
Yes. Many bank-backed LOCs use AR aging reports to set limits. Expect monthly reporting.
How quickly can I draw funds?
Most fintech LOCs allow same-day transfers once set up. Banks may take one business day.
Will there be a personal guarantee?
Yes for almost all LOCs under $500k. Strong collateral can reduce PG exposure.
Can I refinance my LOC into a term loan?
Absolutely—refinancing is common after a growth project so you can free the LOC for emergencies.
Secure a line before you need it.
Submit your bank statements today to lock in a limit before peak season hits.
Start Line of Credit Pre-Qual