Top Banks for Loans for Electricians

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Last annual update: Aug 28, 2022

Electrical businesses have excelled in recent years. During the building boom, builders have had difficulty finding enough electricians to meet their demand. There has been more than enough business to go around.

Home sales have cooled off a bit, but there is still plenty of demand for electricians. Remodeling is extremely popular because many homeowners have pulled their homes off the market and have chosen to remodel rather than sell. Many of these remodeling projects involve electrical work.

An SBA loan can help get your electrical business off the ground. It can be used to purchase vehicles, buy equipment and supplies, refinance debt, or even purchase a competitor’s electrical business.

 

Benefits of owning an electrical business

The biggest benefit of owning an electrical business is independence. Many people who own an electrical business learned the trade by working for a large local or national electrical business or utility. They saw they could earn more by being independent and building their own business.

The earnings for an electrician typically range between $40,000 and $75,000 per year, with some earning over $90,000. In addition to great pay, many electricians use their companies to pay for benefits, like health, life, and disability insurance.

 

How to obtain financing to open, expand, or buy an electrical business

If you’re looking for electrical business financing, consider applying for an SBA loan. The various loan programs offered by the Small Business Administration can help provide the funding you need to set up your business.

The SBA is a government agency that doesn’t lend you the money directly. Instead, it guarantees a significant portion of your loan. That lowers the risk profile for SBA’s lending partners, which include conventional banks and financial institutions, so they’re more willing to approve loan requests.

You also must put significantly less cash or equity down to qualify with an SBA loan. And, with an SBA loan, no covenants or collateral is required.

The most common SBA electrical loans include the SBA 7(a) and Express loans.

 

SBA 7(a) loan for starting or buying an electrical business

The 7(a) is the preferred SBA loan for electrical businesses. You can use the funds made available through this program to purchase vehicles, buy tools and equipment, open a new office, or even purchase a competitor’s company.

If you own an existing electrical business and want to buy out a partner, you can utilize the funds from an SBA 7(a) loan for that purpose.

The maximum SBA loan for an electrical business is $5 million. These term loans are generally repaid with monthly payments that include interest.

The payment stays the same for fixed-rate loans since the interest rate is locked in. However, for variable rate loans, it’s up to the lender to request a different payment amount if the interest rate changes.

 

SBA Express Loans for electrical businesses

SBA Express Loans are a part of the agency’s 7(a) loan program. Up to $500,000 can be borrowed under an Express loan. The approval times are typically much faster for these loans.

Express loans over $25,000 have a collateral requirement. The SBA usually responds to Express loan applications within 36 hours.

The lenders ultimately make all eligibility and credit decisions. The market prime rate plus 4.5-6% interest is applied with repayment terms of up to 10 years.

 

How to apply for an SBA electrical business loan

Access our network of SBA lenders that includes leading nationwide banks, credit unions, and other financial institutions. Our lending partners are experienced in handling applications for electrical businesses, so they will diligently pursue your opportunity.

There are countless SBA approved lenders that are ready to offer you an electrical business SBA loan. These are just some of the top lenders:

RankBankCityState# of LoansAvg Loan $Avg Int
1U.S. BankCincinnatiOH4636,1579.1%
2Huntington BankColumbusOH45140,7247.0%
3TD BankWilmingtonDE4358,99310.2%
4JPMorgan Chase BankColumbusOH37123,6788.5%
5Wells Fargo BankSioux FallsSD2887,98210.2%
6First Home BankSaint PetersburgFL19238,6848.0%
7M&TBuffaloNY1656,4449.8%
8Independence BankEast GreenwichRI16150,0005.8%
9Citizens BankProvidenceRI10218,9008.0%
10Newtek Small Business FinanceLake SuccessNY10691,5009.1%
11PNC BankWilmingtonDE996,6677.3%
12Five Star BankRancho CordovaCA9259,4448.0%
13People's United BankBridgeportCT884,8757.9%
14Eastern BankBostonMA8118,7509.2%
15Bank of AmericaCharlotteNC7247,5577.8%

 

  find me a electricians lender