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📅 Last Updated: April 3, 2023
✏️ Written By Caitlin Wood, BA
Business Loans Plumber

Plumbers are needed to repair household pipes, unclog drains, install gas cooking, fix bathroom issues and even install plumbing fixtures during the construction of new properties. This is why owning your own plumbing business is such a great way to make a living in large cities and smaller towns. Moreover, working for yourself comes with a lot of great benefits, including a favourable salary and the freedom of being your own boss. 

Learn everything you need to know about starting a business in Canada.

But there are also a lot of expenses that come with owning your own business. If you’re currently operating your own plumbing business, chances are you have a lot to think about, especially when it comes to your day-to-day expenses. After all, your equipment, tools, supplies, and repair trucks aren’t going to pay for themselves. This is where a solid business loan can come in handy. If you need some fast financing to make sure your plumbing business is running effectively, we’re the ones to call. We can connect you with the best source of business loans out there and help get your applications approved in just a few short days.

Check out how to reduce your business expenses to boost profits

Best Business Loan Providers in Canada

AmountAPRTerm (months)
SharpShooter Funding1k-300kFee-Based: Starting at 9%12- 60 Learn more
OnDeck5k-300k8% – 29% 6-18Learn more
Lending Loop1k-500k+5.9%3-60Learn more
Thinking CapitalUp to 300k8%-22%6-12 Learn more
Merchant Growth5k-500k-6-18Learn more
BDC100K +6.05% +60Learn more
IOU Financial5K-100k15%+12-18Learn more

Ways You Can Finance Your Plumbing Business With a Business Loan 

It’s true that running any business can be an expensive task and plumbing is no different. With all the hard work that any plumbing specialist puts into their job every single day, there are tons of supplies and other costs to cover. Not to mention, quality plumbing equipment can be pricey. With a good business loan, you won’t have any problems taking care of all your on-the-job expenses.

Plumbing Insurance 

When you get into the plumbing industry, insurance is an unavoidable cost due to safety issues surrounding plumbing work. Plumbers often have to move above and under structures to work and they usually are surrounded by hazardous waste. Moreover, if you have employees, you’ll need liability insurance and workers’ compensation insurance. 

Cash-Flow Problems 

As with any business, your plumbing revenue will be affected by the changes in the economy. As such, you may be faced with an unexpected lower revenue for some months. Unfortunately, you’ll still have to keep up with your fixed expenses which can affect your cash flow.  

Purchase Plumbing Equipment 

In order to successfully run a plumbing business, you’ll need access to certain equipment like wrenches, hacksaws, gas meters, water pumps, and other tools. Moreover, you’ll need a reliable van or trucks to transport you and your equipment to your clients. You may also need to purchase, rent, or construct a warehouse or garage for storing your equipment and vehicles.

Plumbing Supplies

A business loan can help you purchase necessary supplies and spare parts involving piping and tubing. You can also purchase on-the-job gear such as jumpsuits, safety goggles, gloves, steel-toe boots, and more.

Payroll Expenses

If you plan on expanding your services or simply need an extra hand, you’ll need to recruit workers and train them before they can work on their own. This can be particularly expensive due to the shortage of labour workers. Moreover, you’ll also need to add them to payroll.

What Does Your Plumbing Business Need to Qualify For a Business Loan 

Unlike banks, alternative lenders will evaluate your overall financial health to determine if you are creditworthy. Here are some common factors lenders look at when assessing a business loan applicant. 

  • Business credit score and personal credit score – When you apply for a business loan, the lender will evaluate both your personal and business credit score to determine your creditworthiness. 
  • Monthly sales/Revenue statement – Lenders will often ask for your business revenue statements or monthly sales in order to gauge your costs of goods sold and what your net income is. 
  • Cash-flow – Even if your revenue is steady or growing, you can have a negative cash flow. This is important as your cash-flow is the lifeblood of your business. A negative cash flow means you are spending more than you are earning. As such, lenders will usually refrain from lending to businesses with poor cash flow as they’ll be less able to repay them. 
  • Assets – Lender may evaluate your assets when they require some collateral to approve the loan. Businesses can use their real estate, equipment, inventory, accounts receivable, and other business assets as collateral. 
  • Debts – As with any lender your debts and liabilities can affect your ability to qualify. Lenders typically gauge your ability to afford additional debt by checking your debt level. 
  • Time in business – New businesses are known to fail. According to Statistics Canada, approximately 40% of new businesses fail in the first 5 years, and more than 50% fail within the first 10 years. As such, the longer you’ve been in business, the better your odds. 

Alternative Way to Finance Your Plumbing Business

There are many financing options available to businesses in Canada, no matter what industry they are in. Whether it’s plumbing, carpentry, beauty, tech, farming, businesses can all utilize the following financing options to cover costs and grow their business. 

Invoice Financing

Invoice financing works by selling your unpaid invoices to a lender at a discount. This allows you to gain a lump sum of cash which is repaid as your customers make their payments. This is a quick solution to slow-paying customers or whenever you need cash quickly.

Merchant Cash Advance

A merchant cash advance is not a traditional loan, it provides a lump sum of cash that you must repay with a percentage of your future card sales. This form of credit is one of the fastest ways to obtain capital when you need it, especially if you have bad credit. However, it is an expensive way to borrow money, so be sure to evaluate all your options before choosing this one. 

Equipment Loan

As previously mentioned, in order to run a successful plumbing business, you’ll need access to a number of plumbing supplies and equipment. While a business loan can help finance these expenses, so can an equipment loan. An equipment loan works just like a business loan except it is secured with the equipment you purchase. This leads to higher approvals and lower rates. However, lenders will typically only finance up to 80% of the equipment price, so you’ll have to pay for the other 20% upfront.  

Business Line of Credit

A business line of credit allows you to withdraw money whenever you need up to a certain credit limit. Like a credit card as you pay back the amount borrowed, you regain access to those funds. The great thing about a business line of credit is that you only pay interest on the amount withdrawn and you have instant access to it whenever you need it. 

Government Financing

Another way you can finance your plumbing business is by checking out the government financing programs. For example, the Canada Small Business Financing Program (CSBFP) is a government-backed business loan program you can apply for through any major bank or financial institution. The program offers loans as high up to $1 million to help you grow your business. For equipment and leasehold improvements, you can get a loan of up to $350,000. 

Frequently Asked Questions

How do I start a plumbing business in Canada? 

While the complexities of starting a business can’t be summarized in a few paragraphs here are a few pointers to start. 1. Create a business plan – a business plan is a report that details your business goals, and how you plan to attain them. 2. Understand the legalities of your business – for example, in order to run a business, you’ll need to register it and get a business licence. 3. Know your financing needs – starting a business requires capital. Calculate how much you need, where you can get it and which option gives you the optimal flexibility. 

Do I need a business credit score to get a business loan for my plumbing business?

Many start-ups and young businesses obtain business loans without a business credit score. These businesses are usually evaluated based on other business aspects such as their revenue, monthly sales, assets, debt, and the owner’s personal credit score.

How do improve my ability to qualify for a business loan? 

There are quite a few ways you can improve your ability to obtain a business loan. One of the best ways is by increasing your credit score as it’s typically the number one factor used by lenders. Choosing to actively improve your credit score for a few months by making full-on time payments and reducing your debt level can do wonders for your approval. If time is of the essence, securing the loan with an asset or getting a cosigner can not only improve your odds of approval but it can lead to better rates as well.

Secure Your Loan With Loans Canada

There are plenty of benefits of getting your plumbing business a loan through Loans Canada. We offer a fast and simple application that can be completed on your home computer, laptop, or smartphone. Moreover, you’ll get approved for more affordable rates and receive funding within two business days after approval. 

Caitlin Wood Priyanka Correia Lisa Rennie Bryan Daly Cris Ravazzano Margaret Johnson Kale Havervold Liz Enriquez Sean Cooper Veronica Ott Corrina Murdoch Chrissy Kapralos

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