Become Your Own Private Equity in HVAC and Plumbing - Dillon Caraway

Private equity has been buying up HVAC, plumbing, electrical, and other home service companies for years. But Dillon Caraway believes trades owners have more options than they may realize, especially when financing is used as a growth strategy instead of a last resort.In this episode, Tyler is joined again by Dillon Caraway from Live Oak Bank to talk about how service business owners can use lending to fund acquisitions, buy real estate, access working capital, and prepare for succession. Dillon explains what banks actually look for when evaluating a business, why profitability matters more than top-line revenue, and how clean financials can open the door to bigger opportunities.They also discuss what it means to “become your own private equity,” when buying another company makes sense, how DSCR impacts financing, and why owners need to think carefully before taking on debt, buying a building, or preparing for an exit.What You Will Learn in This EpisodeHow Dillon and Live Oak Bank work with HVAC, plumbing, electrical, and other service businesses Why banks care more about cash flow and profitability than revenue What adjusted EBITDA means and why it matters for financing How trades owners can use financing to acquire another business What it means to become your own private equity without giving up control When 100% financing may be available for an acquisition Why keeping cash on the balance sheet matters during growth What banks look for in the existing business, target business, and owner’s personal finances When buying a building makes sense versus continuing to lease How owning real estate can support long-term wealth and succession planning Why trends, work mix, and customer concentration can make or break a deal What DSCR means and why 1.25x is an important benchmark How too much debt can quietly weaken a business Why clean books, accurate tax filings, and stable profitability matter before selling How owners can prepare for succession, partner buyouts, or selling to a key employee Why buyers and banks care about historical performance, not just potential More From Profit & GritBook your complimentary Financial Insight Session with Tyler Martin, fractional CFO for home services and the trades, here:http://cfointrocall.comLearn more at http://cfomadeeasy.comFollow the show for weekly interviews with HVAC, plumbing, and home service owners and experts who share what it really takes to grow, scale, and profit in the trades.If you listen to any of the following shows, we’re sure you’ll love ours too! To The Point Home Services Podcast, Toolbox for the Trades, Masters of Home Service, Home Service Business Coach With David Moerman, BlueCollar.CEO, The Home Service Expert Podcast, Next Level Pros, Blue Collar Business Podcast, Home Service Millionaire with Mike Andes, The Contractor Fight with Tom Reber, and Blue Collar Success Group.🎙️ Profit & Grit by Tyler Martin Real stories. Real strategy. Real results for service-based business owners.🔗 Website: ProfitAndGrit.com 📍 LinkedIn: linkedin.com/in/thinktyler 📸 Instagram & TikTok: @profitandgritTyler Martin, a fractional CFO for home services and the trades 📅 Want to grow your business with smarter financial strategy? Book a free intro meeting