How to Raise Money to Buy an HVAC Business in 2026 (Funding Stack From a Real Texas Close)
by Raises.com
To raise money to buy an HVAC business in 2026, most buyers combine an SBA 7(a) loan or a senior credit facility for roughly 60 to 80 percent of the price, a seller note with rollover equity for 10 to 25 percent, and a small equity slice from the buyer or outside investors. Raises.com advised on exactly that structure for a profitable Texas HVAC contractor that closed in July 2026 with minimal sponsor cash equity, covered by Yahoo Finance and AP News.
Why lenders and investors like HVAC
- Essential, non-discretionary demand. Cooling and heating fail on a schedule nobody controls, and a broken system gets fixed regardless of the economy.
- Recurring revenue is built in. Maintenance agreements, service contracts and replacement cycles produce repeat customers a lender can underwrite.
- A fragmented market. Most HVAC contractors are owner-operated with under $5 million of revenue, which is why private-equity-backed platforms have been reported buying them in volume. Fragmentation means supply of sellers and a clear roll-up thesis.
- Hard assets and a fleet. Trucks, tools and inventory give an asset-based lender something to lend against on top of cash flow.
The 6 funding sources for an HVAC acquisition, ranked
- SBA 7(a) loan. The workhorse for HVAC deals under $5 million. Ten-year term, 10 percent equity injection, personal guarantee from every 20 percent owner. Lenders like the recurring service revenue.
- Seller note with rollover equity. The seller carries part of the price and keeps a stake. In the Texas close the seller rolled equity alongside a note, which reduced cash at close and kept the seller invested through the transition, when technicians and customers decide whether to stay.
- Institutional senior credit facility. Above the SBA cap, or for a platform that will make several acquisitions, a senior facility from a private lender funds the first deal and the add-ons under one agreement.
- Junior debt. A second-lien or mezzanine piece that fills the gap between senior debt and equity on larger deals. It prices higher and it is what let the Texas close happen with minimal sponsor cash.
- Investor equity through an SPV. Outside investors fund the equity gap under Regulation D in exchange for a preferred return and a profit share; you keep control as the operator.
- Equipment and fleet financing. Trucks and shop equipment can be financed separately, freeing acquisition capital for the purchase price and working capital.
The stack behind the Texas close
The deal was a profitable Texas HVAC contractor in the roughly $2.4 million range, the inaugural acquisition of an operator-led roll-up focused on construction and building-services businesses. The structure: an institutional senior credit facility, junior debt, a seller note, seller rollover equity and a structured equity gap, closed with minimal sponsor cash equity. The buyer, Cody Sechelski, booked his first call in October 2025, ran a funding tournament across multiple capital firms, and wired the close in July 2026, about seven months later. His rule after doing it: target a minimum of $1 million in EBITDA with a sweet spot of $5 million and above, because post-close attrition of 10 to 20 percent is real and the margin has to absorb it. Read the press release and hear him tell it.
Comparison: what each source costs on an HVAC deal
| Source | Typical share | Cost (typical, varies) | What it underwrites | Watch-out on HVAC |
|---|---|---|---|---|
| SBA 7(a) | 60 to 80% | Prime plus a capped spread, 10 years | Cash flow, your experience, injection | Seasonality in the trailing twelve months |
| Seller note + rollover | 10 to 25% | Often 5 to 8% on the note; equity for the rollover | Seller's confidence in the business | Define the seller's role in retention |
| Senior credit facility | 50 to 70% | Higher than SBA, faster add-on capacity | Platform thesis and EBITDA | Covenants across the whole platform |
| Junior debt | 10 to 20% | Low to mid teens all in | Total leverage and coverage | Intercreditor terms with the senior lender |
| Investor SPV | 10 to 30% | Preferred return plus profit share | Your plan and your guarantee | Documents must satisfy the lender |
| Equipment financing | Fleet and tools | Asset-backed rates | The equipment itself | Fleet age and warranty transfer |
What you must underwrite before a lender will
- Seasonality. Cooling-heavy markets peak in summer; a trailing twelve months that ends in September looks different from one that ends in March. Lenders normalize it, so should your model.
- Technician retention. Licensed technicians are scarce, and the ones who leave take customers with them. Retention bonuses belong in your sources and uses.
- The refrigerant transition. Since January 2025, new residential and light-commercial systems in the United States use lower-global-warming-potential refrigerants such as R-454B and R-32 rather than R-410A. That changes inventory value, technician training needs and equipment pricing; audit what is on the shelf and on the trucks.
- Licensing. HVAC contracting requires a state license held by a qualifying individual, for example the Texas Department of Licensing and Regulation ACR license, California's CSLB C-20 classification, and Florida's CAC license. If the seller is the license holder, the transition plan must cover who qualifies the business after close.
- Warranty and maintenance-agreement liabilities. Prepaid agreements are revenue the seller already collected and work you will perform. Price them into the deal.
- Customer concentration. Commercial HVAC with a few property-management accounts is a different risk than a residential book of thousands of homeowners.
What HVAC businesses cost
Valuations are quoted as a multiple of seller's discretionary earnings for owner-operated shops and of EBITDA for larger companies. Small residential contractors are commonly marketed in the low single-digit multiples of SDE, while larger companies with $1 million or more of EBITDA have reportedly commanded materially higher EBITDA multiples from private-equity-backed platforms competing for the same targets. The exact number depends on recurring service-agreement revenue, technician count, fleet condition and how much of the business depends on the owner.
What this looks like on a real close
In July 2026 a Raises.com client, a Texas construction operator named Cody Sechelski, closed the inaugural acquisition of his services roll-up: a profitable Texas HVAC contractor in the roughly $2.4 million range. The stack was an institutional senior credit facility, junior debt, a seller note, seller rollover equity and a structured equity gap, closed with minimal sponsor cash equity. He booked his first call in October 2025, so the active engagement ran about seven months, including a funding tournament across multiple capital firms and a final lender that quoted three weeks and took two months. The close was covered by Yahoo Finance, AP News, Morningstar and The Globe and Mail, and he tells the whole story on the podcast.
Raises.com has helped clients raise more than $300 million across business acquisitions, real estate and funds, with documented case studies in the clients' own words. The service is flat fee: no success fee, no carry, no broker-dealer placement charge, and pricing is published on the booking page.
Watch: How Cody Sechelski Raised Millions to Acquire Service Businesses In Texas
Watch: He Closed His First Rollup. This Was The Recipe
Frequently asked questions
Can I get an SBA loan to buy an HVAC company?
Yes. HVAC contractors are a common SBA 7(a) acquisition because service revenue is recurring and the assets are tangible. You need a 10 percent injection, relevant experience or a strong transition plan, and cash flow that covers the loan with room to spare.
Do I need an HVAC license to buy an HVAC business?
You need a licensed qualifying individual attached to the business, which can be you, an employee, or the seller during a transition. Requirements vary by state; Texas, California and Florida each run their own contractor licensing.
How much do I need down to buy an HVAC business?
Ten percent of project cost on an SBA deal, with up to half of that available from a seller note on full standby. The Texas close above used a seller note plus rollover equity and junior debt to close with minimal sponsor cash.
Is now a good time to buy an HVAC business?
Buyers face more competition from private-equity-backed platforms than five years ago, which raises prices for larger targets. Smaller owner-operated shops remain plentiful, and the refrigerant transition creates both a due-diligence item and a replacement-demand tailwind.
How long does it take to raise the money?
Sixty to one hundred twenty days for an SBA loan once your package is complete. The Texas close took about seven months from first call to wire, including a lender that quoted three weeks and took two months, which is why running lenders in parallel matters.
Where to go next
- How Raises.com structures and raises capital for business acquisitions (flat fee, no success fee, no carry).
- The step-by-step guide to buying a business, from search to close.
- The Texas HVAC acquisition press release covered by Yahoo Finance, AP News and Morningstar.
- Watch the client videos and read the FAQ before you book.
- Book a strategy call with one of the advisors. Pricing is shown on the booking page before you pick a time.