The pre-season arithmetic
HVAC contractors who pre-buy units and refrigerant before Memorial Day fill more calls in July than the ones ordering job by job at full markup during a heat wave. Refrigerant bought in February or March is at its annual low; a company using $30,000 of it a year can save several thousand dollars by buying ahead. And the techs have to be hired and trained before the phones start, which means two to four weeks of payroll before peak-season revenue lands.
All of that wants cash in the first quarter, which is exactly when an HVAC company's account is at its seasonal low. The saving is real. So is the timing problem.
The cheapest money is the distributor's
Distributors extend net terms and, for volume buyers, floor-plan financing on equipment orders — 60 or 90 days to pay for units that will be installed and invoiced inside that window. It is the cheapest financing in the trade and it is earned with volume: consolidating purchases from three or four distributors to one or two builds the account that gets the terms. Ask the rep in January, not in May.
Working capital for the rest, read against last summer
Refrigerant, filters and parts stock, the new hires' first month, the marketing that books the maintenance contracts: a working capital loan or a cash advance on your deposits, funded in one to three business days, amounts around half to one and a half times a month's deposits.
Which month the funder treats as typical is what decides the offer, and in March the last three months are the thinnest of the year. Send twelve. A company that deposited $120,000 in July and $40,000 in January is a seasonal business, and an application that says so — with last year's summer in the file and a sentence explaining that the money buys this summer's inventory — is priced on the summer.
Vans and the line
A second or third service van is an asset and finances as equipment over two to six years with the van as security, at a cost far below working capital. Two applications, two days apart, and the van gets the cheap money.
And the durable fix for a business whose cash runs opposite to its season is a line of credit applied for in August against July's statements: drawn in February for the pre-buy, repaid in July, costing nothing in between. Contractors who have one describe March as a different month.