How Buying the Building Changed the Deal
August 24, 2026
In Part 1, we had a fast-growing HVAC company in Phoenix with a financing problem.
(Haven't read it yet? Catch up here.)
The business was healthy. The opportunities were rolling in. But a roughly $421,000 MCA and existing equipment debt were getting in the way of the next move.
So we restructured roughly $900,000 into a monthly term loan, using the company’s trucks, vehicles, and equipment as collateral. That cleared the path for project financing and gave the owner a better way to fund larger jobs.
A respectable ending.
Except it wasn’t the ending.
There was still one fairly important issue sitting in the background.
The Receivables Were Still Tied Up
Years earlier, the owner had purchased the business using an SBA loan. That loan came with a blanket lien on the company’s assets, including its accounts receivable.
Why does that matter?
Because for contractors, accounts receivable can be extremely useful.
You might finish a large commercial job today and wait 30, 60, or 90 days to actually get paid. In the meantime, payroll remains stubbornly committed to arriving every Friday.
AR factoring can help bridge that gap by advancing money against eligible receivables.
But when another lender already has a lien on those receivables, your options get narrower.
We had project financing available, but we still wanted to create more flexibility for the client.
Then the landlord entered the story.
The $6,500 Question
The company was paying roughly $6,500 a month to rent its building.
During the restructuring process, we suggested the owner ask a very simple question:
Would the landlord sell it?
Turns out, yes.
The purchase price was approximately $800,000.
And suddenly, what looked like a real estate decision became part of the larger financing strategy.
That’s where things got interesting.
Why Real Estate Changes the Conversation
Lenders like collateral.
Trucks and equipment are useful. Real estate tends to get their attention even faster.
Unlike accounts receivable, commercial property is a hard asset with obvious value. It gives the lender something substantial behind the loan and can make a larger financing structure possible.
With the property now in play, we could start looking at an SBA commercial real estate loan that would do more than just buy the building.
The strategy being pursued was to finance the roughly $800,000 property purchase while also refinancing the approximately $900,000 term loan from Part 1.
Altogether, we were looking at roughly $2 million in SBA financing.
Now we had something considerably more interesting than a rent check.
The 25-Year Advantage
Because commercial real estate was part of the transaction, the SBA financing could be amortized over 25 years.
That matters because a longer amortization can significantly reduce the monthly payment compared with shorter-term working capital debt.
In this case, the numbers worked out so that owning the property could potentially cost the business less each month than continuing to rent it.
So instead of sending $6,500 to the landlord and getting a pleasant receipt in return, the owner could begin building equity in an asset he actually owns.
Hard to argue with that.
But the Building Did More Than Replace the Rent
The real estate also improved the collateral structure.
That was important because we wanted to avoid tying up the company’s accounts receivable under the new SBA structure being pursued.
Why?
Because as the business grows and takes on larger projects, those receivables can become useful financing tools.
One job may make more sense with project financing.
Another may eventually be better suited for AR factoring.
The goal isn’t to crown one type of financing king and make everyone swear allegiance to it.
The goal is optionality.
Good financing gives a business more ways to move.
Bad financing tends to leave fewer.
This Is Why We Look at the Whole Picture
This story started with an MCA.
Then came debt consolidation, equipment collateral, project financing, an $800,000 building, and a roughly $2 million SBA financing strategy.
If you only looked at each piece individually, you’d miss the point.
The real work was figuring out how everything affected everything else.
The debt affected the project financing.
The lien affected the receivables.
The building changed the collateral.
The collateral changed what we could structure.
And suddenly, the company had a much better foundation for the next stage of growth.
Sometimes the smartest financing move isn’t borrowing more money.
Sometimes it’s reorganizing the pieces you already have until they stop fighting each other.
Your Financing Should Fit the Business You’re Building
If your current financing is getting in the way of growth, it may be time to look at the whole structure, not just the next loan.
Credit Banc helps business owners evaluate the debt, collateral, cash flow, and opportunities already on the table to find financing that actually makes sense for what comes next.
If you’re looking to refinance existing debt, fund a larger project, buy commercial real estate, or simply figure out what options are available, start the conversation with Credit Banc.