Accessing Capital for Your Home Service Business: Top Strategies For Junk Removal, HVAC, Plumbing & Others

Discover top strategies for accessing capital for your home service business. Whether you're in junk removal, HVAC, plumbing, or landscaping, find the best options tailored for small businesses.

If you’re running a home service business (like junk removal, HVAC, plumbing, landscaping, etc.,) one of the key challenges you might face is accessing capital to expand, invest in new equipment, or launch new services.

In this article, we’ll assess the many avenues you can explore. Here’s a quick guide on ways of accessing capital for your small home service business.

1. Traditional Bank Loans

  • Pros: Accessible and relatively straightforward.
  • Cons: May require a strong credit history and collateral.
  • Tip: Build relationships with local banks for personalized services.

Personal Opinion: I suggest going into the bank and meeting the loan officer in person, unless you’re a total doucher, then you may want to stick with online. Yes, I’m serious.

If you’re “that guy/girl/” and like to posture or play the smarmy game, stick to the computer approach.

Remember, people are people, and if they don’t like you and/or believe in you, they’re more likely to say no to a small business that is interested in accessing capital – especially with the current economy.

This method is all about building a relationship that will help you.

If you’re going to build relationships, especially with a bank, be nice and play the sincerity game.

2. Government Grants and Subsidies

  • Pros: Often interest-free and don’t require repayment.
  • Cons: Competitive and may require fulfilling specific criteria.
  • Tip: Research local and federal options tailored for small businesses.

Personal Opinion: This one is very interesting and can be the most attractive option. Afterall, who doesn’t love (1) interest free, and, in most instances, (2) not required to repay the loan?

However, be prepared to roll up your sleeves, stretch your brain, your fingers and your back, cuz you’re going to be filling out a LOT of paperwork.

If you’re not the brightest bulb (hey, we can’t all be Elon) or just hate paperwork, this isn’t your best option. Not only that, but not all businesses are conducive to goverment grants and subsidies. Still, if you’re handy with a pen and have lots of patience, definitely look into this option for accessing capital.

3. Business Lines of Credit

  • Pros: Flexibility in borrowing and repayment.
  • Cons: Interest rates can fluctuate.
  • Tip: Great for handling short-term cash flow needs.

Personal Opinion: This is my favorite option due to the simplicity of applying, speed in which you can access the capital, and ease of access to your funds – if you’re approved.

If you have bad or average credit, save your time and skip this one. No bank will approve you in this economy unless you have excellent credit, and can show strong income – both personal and with your business.

When we needed capital to fund our business growth, we reluctantly pursued this option. Why reluctant? Becuase we didn’t want debt. We had managed to scale to $1M+ in annual revenue within 4 years without taking on any loans.

However, if your business ever experiences an emergency, like, oh, I don’t know….a global virus that forces everyone to stay indoors and compels people to panic like it’s literally a zombie apocolypse, having access to outside capital will come in very handy. 

4. Venture Capital and Angel Investors

  • Pros: Potential for significant investment.
  • Cons: May require giving up equity or control.
  • Tip: Present a solid business plan to attract the right investors.

Personal Opinion: This is my least favorite option for accessing capital. Not because it’s difficult to obtain, although it certainly can be, but because of what you have to give up in order to gain the capital – control!

If you need $1M or more, a VC firm or Angel Investor may be your best option, but know it will come at a steep price, and that price is the lack of control you will likely have once you accept their money.

This could mean they install their people at your company to help oversee operations, or demand that you implement a whole new way of reporting. Regardless, it could cause a massive clash with your culture and create chaos for you and your best people.

However, if you’re focused on your exit strategy, meaning your goal is to build it up as quickly as possible and sell it for a boatload of cash in 3-5 years, this may be the perfect option.

5. Crowdfunding

  • Pros: Opportunity to reach a wide audience.
  • Cons: Success depends on marketing efforts.
  • Tip: Choose the right platform that aligns with your business.

Personal Opinion: This option sounds cool, but in reality, it’s going to be tricky if you own a home service business.

This is typically a great option to pursue if you’ve just created the hoverboard, or the next Furby. It’s easy to get a large audience excited and willing to invest $100 in the hopes that your new product will hit the shelves in the near future.

Getting hundreds or thousands of people to invest in your new business that removes dog poop from people’s yard, not as cool.

6. Equipment Financing

  • Pros: Specific to purchasing new equipment.
  • Cons: Can be limited in scope.
  • Tip: Ideal for upgrading tools and machinery.

Personal Opinion: This is my second favorite option as it’s the easiest to secure if you need more than $50k for your business equipment needs, such as a new truck, skid steer, etc.

The reason this is such a strong option is simple; You’re going to be dealing with a car dealership where they’re highly motivated to get you approved.

All home service businesses (that I can think of) need work vehicles, so rather than securing a loan to purchase these vehicles, I recommend going straight to the source.

Why would it be better to get funding from a bank, for example, then purchase the vehicle with those funds vs through the dealership. Simple; Interest Rate.

You will most likely get a better interest rate if you go through your bank than at the dealership. After all, the dealership/salesperson makes money based on the interest rate, so they’re motivated to see you pay higher rates than your bank.

Still, this may not only be the easier option, it may be your only option if you have less than perfect credit.

7. Peer-to-Peer Lending

  • Pros: More informal and can be quicker.
  • Cons: Varying interest rates.
  • Tip: Consider platforms like LendingClub or Prosper.

Personal Opinion: I’ve never used this option, but it’s an interesting one to consider. With websites like LendingClub and Prosper, gone are the days you need to send out mass emails or even physical mail to solicit funds from friends, family or even strangers.

While this process can be VERY fast, as in – access to funds within minutes (literally) it comes at a cost, and that is higher interest rates than more traditional sources, such as your local bank.

What’s The Next Step?

Your head may be spinning, I get it. Hopefully, I’ve given you enough information to make an informed decision. Accessing capital is a very serious endeavor, one that you should properly evaluate vs out of panic.

However, accessing capital for your home service business doesn’t have to be a daunting task. From traditional bank loans to crowdfunding, various avenues are available for businesses in junk removal, HVAC, plumbing, and landscaping.

Evaluate your needs, do your research, and choose the right option to fuel your growth.

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