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Plumbing is a recession-resistant industry. Even during economic downturns, it tends to remain steady, or even experience growth.
Right now, the industry's growing. The U.S. Bureau of Labor Statistics projects employment of plumbers, pipefitters, and steamfitters will grow 7% between 2025 and 2035, which is much faster than average.
There's lots of work to go around, and plumbing financing can cover payroll for a new hire, the cost of new equipment, and other operating expenses that come with running a small business.
Below, I cover the plumbing business loan options available for small to midsize business owners. I'll go over the eligibility requirements for plumbing financing, what it costs, and what lenders consider.
| Financing option | Funding speed | Amount | Rate or cost | Common fit |
|---|---|---|---|---|
| Short-term business loan | As fast as same day | $10,000 to $5,000,000 | Starting at 6% APR | A defined purchase or project with a clear payback |
| Business line of credit | As fast as same day | Up to $5,000,000 | Starting at 6% APR | Payroll and material gaps that come and go |
| Equipment financing | 1 to 5 days | Up to 100% of equipment value | Starting at 6% APR | Vans, jetters, cameras, and machines |
| Invoice factoring | 1 to 2 weeks | Up to 100% of invoice value | 0.5% to 5% per invoice per month | Commercial jobs waiting on 30, 60, or 90 day payment |
| Merchant cash advance | As fast as same day | Up to $5,000,000 | Factor rate of 1.08 to 1.45 | Emergency repairs that can't wait on underwriting |
| SBA 7(a) | As fast as two weeks, typically 30 to 90 days | Up to $5,000,000 | Starting at 6.75% | Larger moves where a low rate matters more than speed |
| HELOC | As fast as one week | Up to $750,000 | Commonly 8% to 13% | Business owners with home equity and a long payback project |
| SBA 504 | Varies by CDC | $25,000 to $5,500,000 | Fixed, set at the monthly debenture sale | Buying a shop building, yard, or heavy equipment |
| SBA Microloans | Varies by intermediary | Up to $50,000 | Set by the intermediary lender | Small tool and working capital needs |
Types of Plumbing Business Loans
Each of the plumbing financing options below serves a different purpose. Here's a glance at what each one does.
Short-term business loans
A lump sum from $10,000 to $5 million repaid on a fixed schedule. Repayment terms run from 6 to 36 months with APRs starting at 6%. Typically used for a single, large purchase.
Business lines of credit
A revolving credit line up to $5 million that covers the day-to-day costs of running a business. You only pay interest on what you draw. APRs start at 6%.
Equipment financing
Covers up to 100% of the value of specialized tools and vehicles for your plumbing business. Repayment terms run from 12 to 72 months and the equipment serves as the collateral.
Invoice factoring
Advances up to 100% of the value of an unpaid invoice for a fee of 0.5% to 5% per invoice per month. Tied to when the invoiced customer pays, typically 30, 60, or 90 days.
SBA loans
These loans are backed by the U.S. Small Business Administration (SBA) and run up to $5 million. Terms span 10 to 25 years with rates starting at 6.75%. Financing can land as fast as two weeks, but typically takes 30 to 90 days.
Home equity lines of credit (HELOC)
A revolving credit line secured by the value of your home. Lines run up to $750,000 with a draw period of five years. Your home secures the line, so it's at risk if you default.
Merchant cash advances
An advance against future revenue at a factor rate of 1.08 to 1.45. Advance up to $5 million and repay in daily, weekly, or monthly payments. Fits if you need money quickly, but more expensive than other options.
How Plumbing Companies Put Financing To Work
Here's how I see plumbing businesses commonly using their financing.
Service vehicles and fleet expansion. Equipment financing makes sense here. The equipment secures the loan.
Buying specialized tools. Use equipment financing to purchase hydro-jetters and sewer cameras to open new service lines.
Hiring new employees. A business line of credit fits here. Use it to fill a gap in payroll or hire a new tech for your team.
Licensing and certification. These smaller recurring costs are another place where a business line of credit makes sense.
Cash flow gaps. Plumbing isn't a seasonal business, but there are still ups and downs. A line of credit, a business credit card, or a HELOC can help cover slow periods.
Business expansion. A short-term business loan typically works when you want to add a service line or another option with a defined repayment period.
Minimum Qualifications
$10,000 in monthly revenue
Your business must earn at least $10K per month in a business bank account.
500+ credit score
You can get approved with any credit score. But the better your credit rating, the better interest rates lenders offer. Your FICO score should be above 500.
Minimum six months in business
Your company should be operational for a minimum of six months. This shows business lenders that your company is sustainable and won't go out of business.
Have a business bank account
Your Clarify advisor will need three or four months of your most recent bank statements to verify income. This is just to see you're actually making $10K+ month in revenue.
What Lenders Consider
Every lender's requirements are different, but they tend to look at the same things.
Time in business
Most lenders want at least 6 months of operating history, though longer track records unlock better terms.
Revenue
Annual revenue and monthly revenue tell a lender if you're able to take on another payment.
Personal credit score
Your credit score still matters, even for business financing. Higher scores unlock better terms.
Cash flow and bank statements
Bank statements that show regular deposits signal to lenders that you've got a healthy cash flow.
Loan amount
Larger loan amounts tend to draw more scrutiny from lenders.
Collateral
In most cases, the asset secures the loan. Revenue-based financing options typically don't require collateral but may ask you to sign a personal guarantee.
What It Costs To Grow a Plumbing Business
Growing your plumbing business involves more than just having the right tools. Here's what other costs are involved.
State plumbing license
$200 to $500
Exam fees and training
$500 to $1,500
Work truck or van
$15,000 to $35,000
Plumbing tools
$2,000 to $5,000
Inspection cameras, drain machines, and leak detectors
$3,000 to $10,000
Safety gear and uniforms
$500 to $1,000
Financing by Type of Plumbing Business
Three types of plumbing businesses often come to me looking for financing. Each has its own unique needs.
Residential plumbing companies. Your friendly neighborhood plumber. Cash comes in quickly, usually at the end of each house call. They face challenges with marketing, local SEO, and hiring.
Commercial plumbing companies. Usually larger businesses that serve other companies. Bigger jobs and longer payment cycles. Business lines of credit or invoice factoring help bridge gaps.
Plumbing franchises. Built-in customers and marketing support, but expect to pay a lot up front. This includes franchise fees, buildout costs, and equipment packages. SBA 7(a) loans cover these costs.
How To Apply and Strengthen Your Application
Preparing a strong application helps your chances with both traditional lenders, like banks and credit unions, and alternative lenders. Here are a few ways to strengthen your application:
Match your needs to the right financing. An equipment purchase suits equipment financing or an SBA 504 program. The right loan structure speeds up your application.
Clean up your personal credit. Pull your credit report and check for any inaccuracies before you apply.
Separate business and personal bank accounts. Lenders like to see that you keep them separate, even if you run a small business or you're a sole proprietorship.
Show steady job volume. Underwriters look at several months of bank statements to make sure you're taking in regular work.
Prepare your documents in advance. You'll need bank statements, tax returns, financial statements, and any records for the equipment you own or existing contracts.
Write a business plan. It's a clear explanation of how you plan to use the money. It helps lenders understand what your business goals are.
Grow Your Plumbing Business With Clarify Capital
The right plumbing business loan depends on your individual and business needs. At Clarify Capital, we work with a network of 75+ vetted, reputable lenders to help you compare several offers at once.
When you're ready to see what you qualify for, apply today and a lending advisor will go over the numbers with you. Checking your options won't affect your credit score.
Plumbing Business Loans FAQ
Here are some of the most common questions I hear about plumbing business financing.
How Do You Get a Plumbing Business Loan?
Start by figuring out the specific need and then match it to the financing. You'll need three to four months of bank statements, recent tax returns, and financial statements.
What's the Monthly Payment on a $50,000 Business Loan?
It depends on the interest rate and repayment terms. At a 6% APR, a $50,000 loan costs about $4,303 a month over 12 months, $2,216 over 24 months, and $1,521 over 36 months.
How Much Money Do You Need To Start a Plumbing Business?
It depends, but total startup costs for a new plumbing business typically span $10,000 to $50,000+. This cost includes tools, licensing, insurance, marketing, and vehicles.
How Do You Build Business Credit for a Plumbing Business?
A good place to start is getting an EIN and opening a business bank account. Keep utilization low on any business credit cards and pay your debt on schedule. Pull your business credit report and correct any records.
How Do You Choose a Lender for a Small Plumbing Business?
Compare lenders on the total cost of the loan. This includes any fees like origination fees, prepayment penalties, and how often you pay.
Can a Newer Plumbing Company Qualify?
It depends. Most lenders want to see some operating history. SBA loans through Clarify Capital's network ask for at least two years of operating history. Clarify Capital doesn't fund startups. You'll need at least six months of operating history to qualify through our network.
What Credit Score Do You Need for a Plumbing Business Loan?
It depends on the type of financing. Equipment financing and short-term business loans start with a credit score of 550. Higher scores tend to unlock better rates and terms.
Is My Information Secure When I Apply?
Yes. Clarify follows SOC 2 security principles, and your application data stays protected throughout the process. Checking your options doesn't require a hard credit pull, so exploring what you qualify for won't cost you points on your score.
Bryan Gerson
Co-founder, Clarify
Bryan has personally arranged over $900 million in funding for businesses across trucking, restaurants, retail, construction, and healthcare. Since graduating from the University of Arizona in 2011, Bryan has spent his entire career in alternative finance, helping business owners secure capital when traditional banks turn them away. He specializes in bad credit funding, no doc lending, invoice factoring, and working capital solutions. More about the Clarify team →
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