I’m not a licensed tech or contractor but searching for home service Cos.

September 17, 2022

by a searcher from University of Connecticut in Houston, TX, USA

Hi All,

I have been going through my deal flow. Not limiting myself too much geographically but I like the contractor businesses such as HVAC, Landscapers, etc
(recession resistant!)

I have no technical skills in this space but looking at businesses which range from###-###-#### employees and SDE of $250k - $600k. Am I going to face obstacles from a financing standpoint as I’m not licensed in the space? Any other unseen hurdles I should be aware of?

Helpful tips for others as I’d like to give back with all the great advice here:

-hubspot crm for dealflow is great and free
-sba website has a list of the top lenders closing loans every quarter on their website-our searhfunder go to’s are There as well!
-set up alerts on bizbuysell to recover new listings with your search criteria
- contractors can get a leg up on government contracts through minority certifications(sba can point you to these as well)

Reply by a lender
from California State University, Sacramento in Seattle, WA, USA

+1 to Saad's comments above. adding: Each state is going to have specific requirements. We need to know how long it will take for you to obtain said license and that will guide what you and your lender are trying to mitigate. Tying seller note to buyer getting the license AND having an employment contract with an employee that has the license can be short-term strategies while you study for and obtain licenses. The risk that the bank (and the buyer) is trying to mitigate is that the owner/guarantor is having to rely on third-parties to legally operate the company. DM for more details. redacted We have a service contractor vertical so have lots of experience is trying to navigate this particular key risk.

Reply by a searcher
from California State Polytechnic University in San Diego, CA, USA

Not aware of lenders that would lend you money based on not having a license in an industry that requires a license. You could use an RMO, but it gets expensive, or you could use an RME, but that requires relying on an employee; both scenarios make it difficult to find bank lending.

+1 more reply.

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