Buying a home service business may be one of the fastest paths to building long-term wealth, but only if you're prepared for the risk.
In this episode of JackQuisitions, Jack Carr explains how the SBA 7(a) loan program allows buyers to acquire HVAC, plumbing, and electrical businesses with relatively little capital down, then use growth and future acquisitions to compound value over time. He also covers the realities of SBA financing, the risks of leverage, and why great operators—not great investors—win in this business.
If you've ever considered buying a business instead of climbing the corporate ladder, this episode is your introduction to the acquisition playbook.
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In this episode:
→ How SBA 7(a) loans work
→ Buying a business with 10–15% down
→ The SBA expansion strategy
→ Growing through acquisitions
→ Why EBITDA growth drives value
→ The risks every buyer should understand
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𝕏: https://x.com/thehvacjack
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Sponsor
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First Internet Bank
Looking to buy or grow a home service business? First Internet Bank offers SBA financing for acquisitions, partner buyouts, and commercial real estate. Mention Owned and Operated for a reduced good faith deposit, a free deal review, and buyside prequalification: https://alanfib.com/
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One of the simplest but not easiest way of creating generational wealth, of becoming a millionaire, is not gonna be working your way up the corporate ladder. Don't get me wrong, the corporate ladder is gonna build you a ton. It'll build you a ton of job security and job safety. Is you work for a company, you switch companies every couple years in whatever industry you're in, you work your way up to senior VP, VP, you're making two, three, four hundred thousand dollars a year, great, awesome for you. Hey, take that money over the next 20 years, invest it in the stock market, and great, you can have a wonderful, comfortable, happy living with a nine to five-ish job, and get your four weeks of PTO, and you're good to go. But if you want to bet on yourself, if you want the freedom of choice, not necessarily the freedom of time, but the freedom of choice, and you want to take really, really risky bets, then the answer for you might be buying a home service company.
So my name's Jack. I bought a few home service companies in Plumbing, HVAC, electrical. Um, I've grown them up and I've sold a few off. And one of the biggest opportunities in the intellectual millennial, I'm coining that term, intellectual millennials life, where you're in your 30s, young 30s, you have you're you're smart, you're a smart individual, you're just grinding away at the corporate ladder, you probably are making decent money, but you see the path, and the path doesn't change until you're 60. And one of the answers, and my and what I did is I noticed this answer and I said, Hey, there's a crazy opportunity out there, it's a highly risky. You could lose it all and have to start over tomorrow. Many people have, but there's a huge opportunity in going out and buying a home service
company. There's a program called the SBA 7A, it's not for everybody, but what it allows you to do is it allows you to take loans out at about 10 to 15 percent down and buy a business that normally a bank wouldn't lend on, and at least not at that down payment. And so you go out, you find a nice size HVAC company that maybe is doing two to three million dollars in revenue a year, and you go to the SBA and you say, Hey, I want to buy this business at we'll say two million dollars a year, it might be generating three to four million dollars in total revenue. If you get lucky, I mean there's a ton there that I'm not gonna get into today on how to buy your first business, but you go out, you buy this three million dollar a year business, it's doing four to five hundred thousand in SDE, meaning seller discretionary earnings, it's generating that amount of money to you or to growth revenue, you have this big looming debt over your head, right? You have the SBA, which is a government-backed loan, and uh you have to a lot of times put up collateral. If you own real estate, you have to put up that real estate as collateral. So, unless you're in a castle doctrine state like Texas, they can take your home from you if you default on that loan. And again, people have. But if you are a great operator, you understand business, you can grow the company. Uh, there's opportunities in the SBA, like the SBA expansion program, which allows you to buy a second business in that same category, NAICS code. So if you buy an HVAC company, you can buy another HVAC company uh and utilize the growth equity from the first company to be able to buy the second company. So you can buy a second business with 0% down, like that's the real 0% down strategy.
And you can stack these together, stack a bunch of these HVAC companies together, and through organic growth plus acquisition growth, you can build yourself a really large portfolio of HVAC companies and sell them. And if you have been watching or you understand a little bit about MA in the home service space, a million dollar HVAC EBITDA HVAC company is going for 6x, four to six to eight X, depending on what type and blah blah blah. But we'll say six for average. If you can grow it to two million, you're looking at six to eight X. And so um, I mean, we're talking here, you took a risk, you put down uh 10% for easy math sake of that $300 or $3 million loan, you put up $300,000, and in four years in my case, but depending on the years in your case, you grow it to $1 million, $2 million in EBITDA. We'll say, we'll say $1 million in EBITDA here, and it's selling for 6X just to be super conservative, you're making $12 million. So you have to pay off all that debt, which you already have, but still you're walking away with a $300,000 cash in, a $12 million cash out minus the costs of the businesses that you bought. We'll say you bought two three million dollar businesses, you're walking away in a few years with six million dollars. Uh obviously purchase price, there's there's cuts that come through there, but then not also not including though the pay down of that loan itself over the 10-year amortization. So huge opportunity though. Huge opportunity if you are a great operator, if you're an intelligent young person who has the will and the skill and the ability to handle a lot of pain. There's a great path, a very simple path to be able to make millions of dollars. If you like what you heard, if you want to learn more about the SBA, head on over to Alan Fib.com, A-L-A-N-F-I-B.com. He's one of our partners we work with that is at first internet bank. Alan focuses almost solely on home service loans, uh, 7A home service loans with the SBA. Uh, he's amazing and he'll help you and guide you through the loan process as well as he'll get you pre qualified and see what you could potentially buy up to. Alan is the man. Head on over to FIB, Alan FIB.com and get more information. If you like what you heard, like, subscribe, share, and I'll give you more information on the SBA 7A.
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