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Buy a Restoration Business in 2026: Multiples, Diligence, Deal Structures

Updated June 2026 · CT Acquisitions

Buying a restoration business is one of the most asymmetric trades in lower-middle-market home services M&A right now. The category sits at the intersection of insurance economics, 24/7 emergency response, and a $210B+ annual property insurance claim flow. PE platforms have moved hard since 2021 (BluSky to Partners Group August 2021, BELFOR under American Industrial Partners). You are buying an insurance-claim collection business wrapped around a water-extraction crew, and getting that distinction wrong is what separates platform-grade deals from founder traps.

This guide is the buyer’s playbook. It covers how buying a restoration business actually works in 2026, which operational signals separate a 5x retail-heavy operator from a 9x TPA platform, what deal structures sellers will sign, and how to integrate without killing the carrier relationships you just paid a premium to acquire.

Why restoration is a buyer’s vertical in 2026

Three structural forces make restoration one of the most defensible buys in lower-middle-market home services, and the combination is genuinely rare.

First, insurance-funded demand. Roughly 70 to 85 percent of mitigation revenue at a mature operator is billed directly to property insurance carriers under Xactimate pricing. The customer is not the homeowner. The customer is Travelers, State Farm, Allstate, Liberty Mutual, or Chubb. That changes the credit profile of the receivable, the seasonality, and the competitive moat. Operators with TPA program enrollment receive work assignments from the carrier directly, which is structurally closer to a subscription business than to a discretionary trade.

Second, demand inelasticity at the worst possible moment. Water, fire, smoke, and mold damage all share the same characteristic: the customer cannot wait. The IICRC S500 standard calls for water mitigation to begin within 24 to 48 hours of loss to prevent secondary mold growth, and carriers enforce this through their TPA networks. There is no discretionary delay and no comparison shopping. The operator with 24/7 dispatch and capacity wins the job.

Third, fragmentation under active consolidation. The US restoration market is roughly $210B annually across property damage mitigation, reconstruction, and contents. The top five consolidators (BELFOR, SERVPRO franchise system, BluSky, Cotton, PuroClean franchise system) collectively hold less than 25 percent of the market. The remaining 75 percent is held by more than 30,000 independent operators, most generating $1M to $15M in revenue. Every PE platform in the space is actively rolling up.

For buyers, the combination is unusually attractive: a category with insurance-grade receivable economics, recession-resistant demand, and enough supply of quality targets to still matter. The hard part is that the best operators know exactly what they have, and the bidding above $2M EBITDA is fierce.

What buyers are actually paying for restoration

Restoration valuation ranges are wider than HVAC or plumbing because the gap between a TPA-enrolled operator and a retail-direct shop is enormous. A $1M EBITDA restoration business with 20 percent retail revenue, no TPA enrollment, and a founder running every estimate is a fundamentally different asset than a $1M EBITDA operator with Crawford Contractor Connection plus Sedgwick TPA placement, 75 percent carrier-direct revenue, IICRC certified firm status, and a project manager bench. The multiples reflect the difference.

The spread between 5x and 10x is not random. Six factors explain almost all of it, and every sophisticated restoration buyer in the market models them explicitly:

• TPA program enrollment depth. A single TPA placement (say Crawford Contractor Connection only) is worth a multiple bump. Multi-TPA enrollment plus direct carrier programs with two or three top-25 carriers is platform-grade. Buyers value the relationship inventory and the work-assignment flow.
• Carrier concentration. <15 percent from any single carrier is platform-grade. >30 percent from one carrier triggers a meaningful discount because TPA program termination risk is real and buyers price it.
• IICRC certification depth. IICRC certified firm status plus tier-3 cleaning technicians (WRT, ASD, AMRT, FSRT) with documented continuing education is table stakes for TPA enrollment and platform pricing.
• 24/7 dispatch infrastructure. Live answering 24/7 (not voicemail), GPS-tracked fleet, equipment-tracking systems (DRYBOOK, Encircle, PSA Software), and documented average response time under 60 minutes for emergency loss.
• Large-loss capability. The ability to mobilize on a single $250K+ commercial loss within 4 hours, including project management bench, in-house thermography, sub-contractor relationships, and the working capital to float 90+ day insurance receivables.
• Reconstruction integration. Operators with in-house reconstruction (not just mitigation) earn 2x the gross revenue per claim and lock in the customer for the rebuild phase. Pure-mitigation operators get a lower multiple.

The 2026 pricing reality

Platform consolidator activity has compressed pricing upward since 2022. BluSky Restoration Contractors went to Partners Group at a reported valuation in the $1.0B+ range in August 2021 and continues to add tuck-in acquisitions at platform multiples. BELFOR Property Restoration, owned by American Industrial Partners since 2019, has been the most acquisitive in commercial large-loss. Cotton Holdings, family-owned and consolidator-backed across multiple vehicles, has built a $400M+ revenue base on commercial and disaster-response work. SERVPRO Industries under Blackstone since 2019 acquires franchise systems through a different model (royalty stream consolidation rather than direct operator roll-up) but the bidding pressure is the same. The result is that platform-grade restoration operators in the $2M to $5M EBITDA range routinely receive multiple LOIs at 8.5x to 10x.

For independent and search-fund buyers, the implication is straightforward. You either need a differentiated thesis (a specific MSA where the platforms are under-invested, a sub-segment like contents restoration or biohazard that the platforms overlook), or you need to fish in the $400K to $1.5M SDE band where platform buyers do not compete. In that range, valuations sit at 4.0x to 6.0x SDE and sellers prioritize non-price terms like continuity and franchise system compatibility.

The TPA program economics buyers must understand

If you take away one thing from buying a restoration business, take this: TPA programs are the moat, the receivable structure, and the integration risk all at once. A buyer who does not deeply understand TPA economics will overpay or underpay by 1.5x to 2.5x EBITDA, and will mis-structure the post-close integration.

What a TPA actually is

Third-party administrators sit between the insurance carrier and the restoration contractor. The largest are Crawford Contractor Connection, Sedgwick, Innovation Property Services, Alacrity Solutions, and carrier-direct programs (State Farm Premier Service, Liberty Mutual Authorized Service Network, Allstate Good Hands Repair Network, USAA Preferred Contractor). The TPA dispatches the contractor from a vetted network, monitors performance, and processes payment. The contractor agrees to Xactimate pricing, pre-defined cycle times, and performance scoring on customer satisfaction, cycle time, supplemental rate, and scope accuracy.

The revenue lockup math and transferability

An operator with two TPA programs (say Crawford plus Sedgwick) plus one direct carrier program typically generates 30 to 50 percent of revenue from those assignments. The work flows automatically. That revenue is functionally subscription economics, which is why buyers pay platform multiples for it. But TPA enrollment sits in the legal entity, not the asset. In an asset sale, the buyer must re-apply, and Crawford typically takes 60 to 120 days to re-credential a new ownership entity. A buyer who acquires a TPA-heavy operator as an asset purchase without pre-negotiating the transition can lose 90 to 180 days of program flow post-close. This is the single most common value-destruction event in restoration M&A. The structures that work: stock purchase, pre-close TPA notification with buyer credentialing in parallel, and seller commitment to remain available for 90 days.

What buyers pay for TPA depth

Single TPA enrollment is worth 0.5x to 1.0x EBITDA uplift versus a comparable retail operator. Multi-TPA plus one direct carrier program is worth 1.5x to 2.5x. Four or more placements with multi-year tenure and top-quartile scorecards is worth 2.5x to 4.0x. That gap is why platform buyers pay 9.5x for a $2M EBITDA TPA-deep operator and walk on a $2M EBITDA retail-direct operator at 6.0x.

The six buyer archetypes in restoration

Understanding which buyer you are (and which you compete against) changes how you structure offers and how you source.

1. PE-backed platform consolidators

The named players: BluSky Restoration Contractors (Partners Group, August 2021), BELFOR Property Restoration (American Industrial Partners majority since November 2019), Cotton Holdings (family-controlled with consolidator-style growth), ATI Restoration (Audax Group since November 2019), Interstate Restoration, and Signal Restoration Services. These platforms acquire 5 to 25 add-ons over a 3 to 5 year hold. They pay the highest multiples (8.5x to 10x+) because they can apply debt against the combined entity and exit to a larger platform or strategic at a higher multiple than they acquired. Target profile: $1.5M to $10M EBITDA, multi-TPA enrolled, in-house reconstruction capability, management bench. They move fast and write 60 to 75 percent of purchase price at close.

2. Franchise system acquirers

SERVPRO Industries (Blackstone since April 2019), PuroClean (Riverside Company since November 2019), Rainbow Restoration (Neighborly), Paul Davis Restoration, and 1-800 Water Damage acquire either individual franchise locations or full franchise systems. The economics differ from direct platform consolidation because the parent collects royalty rather than direct profit. For franchisees looking to sell to other franchisees within the system, the buyer-pool dynamics are unique: faster diligence, tighter geography, and a built-in cultural fit. Multiples in franchise-to-franchise transactions typically run 4.5x to 7.0x.

3. Strategic regional acquirers

Large independent restoration operators (often PE-backed at later stage) filling geographic gaps or adding commercial large-loss capability. These buyers pay competitive multiples (7.0x to 9.0x) for targets that complete a regional footprint or open a TPA program tier they cannot achieve organically. Integration tends to be more thoughtful since they already understand the carrier dynamics.

4. Independent sponsors

Deal-by-deal capital, usually a single principal or small team with LP commitments assembled per transaction. They compete well on creative structuring (earnouts tied to TPA retention, rollover equity, seller financing) when they cannot match platform pricing. Good fit for sellers who want a long-term partner and are willing to take some risk on the post-close TPA transition.

5. Search funds

Individual operators with institutional backing looking for one restoration business to run. Multiples: 4.5x to 6.5x SDE/EBITDA. Target profile: $400K to $2M SDE, established carrier relationships, processes that do not require the founder. Good fit for founders who want a clean exit and value continuity over maximum price. Restoration is challenging for first-time search fund buyers because the operations are emergency-response intensive and the receivable cycle is unforgiving.

6. Family offices

Long-hold capital (10 to 25 year horizon) that does not need platform exits. Price similarly to PE platforms but with more patience on integration and less debt. Attractive to sellers prioritizing legacy and to operators who want to keep building the business with patient capital rather than be flipped in 4 years.

Due diligence: the restoration-specific deep dive

Standard M&A due diligence is necessary but nowhere near sufficient for restoration. The category-specific signals are where value creation and destruction actually happen. Here is what experienced restoration buyers do in addition to a standard quality of earnings, legal, and insurance review.

Revenue mix decomposition by funding source

Do not accept the seller’s definition of insurance revenue. Pull 24 months of project-level data and bucket every claim: carrier-direct (which carrier), TPA-assigned (which TPA, scorecard), retail-direct cash, commercial direct-bill, public-adjuster sourced, and warranty. Sellers frequently classify referral-sourced work as carrier-direct when the actual relationship sits with a public adjuster intermediary, which is weaker economics.

TPA scorecard analysis

For every active TPA enrollment, request 12 months of performance scorecards. Key metrics: customer satisfaction (target above 90 percent on Crawford, above 4.5/5.0 on Sedgwick); cycle time to first dry standard (target under 4 days on water mitigation); supplemental rate; photo documentation completeness; re-inspection findings. An operator on probation or with deteriorating trends is a different asset than one in good standing. Buyers who do not see these scorecards before LOI are flying blind.

Accounts receivable aging by carrier

Restoration AR is structurally different from any other home services AR. Insurance carriers pay on their own cycle, supplemental claims take 60 to 120 days, and large losses on contested coverage can sit at 180+ days. Healthy aging: 0 to 30 days carries 40 to 55 percent of AR; 31 to 60 days 20 to 30 percent; 61 to 90 days 10 to 20 percent; 91 to 180 days 5 to 12 percent; 180+ days under 5 percent. Pull aging by individual carrier and by project manager to surface disputes or documentation problems.

Xactimate pricing discipline audit

Sample 30 to 50 closed claims. Compare Xactimate scope to actual work performed (photo documentation, technician time, equipment hours). Two failure patterns: scope-inflation (buyer inherits chargeback risk on carrier audits) and scope-deflation (operator is leaving money on the table). Both materially affect EBITDA the buyer should pay for.

24/7 dispatch and IICRC certification

Pull call-log data: time-of-call distribution, live-answer rate (target 100 percent on emergency line), dispatch-to-arrival time (target under 60 minutes on metro water mitigation), and surge capacity during catastrophic events (Hurricane Helene September 2024, Hurricane Milton October 2024, January 2026 California wildfires). Verify IICRC certified firm status and individual technician certifications (WRT, ASD, AMRT, FSRT, OCT, CCT) with expiration dates and continuing education compliance.

Equipment, fleet, and labor pool

Inventory dehumidifiers (LGR and desiccant), air movers, HEPA air scrubbers, thermal imaging cameras (FLIR), moisture meters, ozone generators, and hydroxyl generators. Verify counts against tracking software (DRYBOOK, Encircle). For sub-contractor pools, review agreements, insurance certificates, and workers compensation classification (mis-classified labor is a common restoration exposure). For W-2 technicians, verify EPA RRP certifications, OSHA training, and respirator fit-test compliance.

Structuring the offer

The best restoration buyers win on structure as often as on price. A well-structured offer can beat a higher nominal offer if it matches what the seller actually cares about and protects the buyer from the TPA-transition risk.

The standard restoration deal structure (2026)

• Cash at close: 60 to 75 percent of total consideration. Lower than HVAC because the TPA-transition risk justifies more deferred consideration.
• Seller rollover equity: 5 to 15 percent in platform deals where the seller continues operating. 0 percent in clean-exit deals.
• Earnout: 15 to 25 percent over 18 to 30 months, typically tied to TPA program retention, carrier-direct revenue retention, or scorecard performance maintenance. Longer than HVAC because TPA transitions can take 6 to 12 months to complete.
• Escrow: 10 to 12 percent held 18 to 24 months against indemnification claims, with a specific carve-out for TPA scorecard re-inspection findings on pre-close claims.
• Seller note: 0 to 10 percent, typically subordinated to senior debt. Common in independent sponsor and search fund deals.

Where smart restoration buyers differentiate

The offer components restoration sellers weight most heavily (in order): cash at close percentage, earnout achievability (and whether the metrics are within seller control), TPA program continuity commitment, key employee retention packages for project managers and lead technicians, and cultural continuity. Price per se is often the fifth or sixth factor for founders who built a 15+ year operator brand.

Buyers who win on non-price factors typically: pre-commit to project manager and lead technician retention bonuses (often 4 to 6 months salary for named key people, paid 12 to 18 months post-close); structure earnouts with achievable floors (80 percent TPA scorecard maintenance triggers a minimum payment, with upside for overperformance); secure representations and warranties insurance to reduce escrow burden; and commit in writing to maintaining the seller’s carrier relationships through the transition period.

The earnout trap in restoration

The single most destructive element of a restoration deal is an earnout tied to EBITDA. Sellers justifiably worry about post-close cost allocation (corporate overhead push-down, transferred administrative cost, integration spend) and will not perform under EBITDA-based structures. If the earnout is tied to revenue without a TPA retention overlay, sellers may push retail work that does not represent the strategic asset the buyer paid for.

The structures that work in restoration: TPA program retention (measured against a 12-month pre-close baseline), carrier-direct revenue retention percentage, average TPA scorecard score maintenance, and project manager retention percentage. All four are within seller influence for 18 to 24 months post-close, and all four protect the buyer from the value-destruction event that matters most.

Integration: where restoration acquirers win or lose

The PE firms acquiring restoration platforms publicly cite their integration playbooks, but the on-the-ground reality is more variable. The restoration deals that compound are the ones where buyers respect five operational principles.

Do not touch the TPA relationships for 12 months

The fastest way to destroy value in a restoration acquisition is to consolidate billing, change the project manager assigned to a TPA program, or shift the dispatcher who answers the after-hours line. TPAs grade on consistency. Leave TPA-facing operations untouched for the first 12 months, even if it means running parallel systems.

Lock in project managers before close

Restoration businesses run on project managers, not technicians. A senior PM with 7+ years of carrier relationships is worth $150K to $250K in fully-loaded comp. Once a deal is announced, competitors reach out within 48 hours. Structure retention bonuses (15 to 25 percent of annual comp, paid in 12 to 18 months) for named PMs, contingent on remaining employed and TPA scorecard maintenance.

Do not consolidate equipment for the first season

Restoration equipment is the production capacity. A buyer who pulls 30 percent of air mover and dehumidifier inventory to a centralized depot in month two will be short when the first major water loss event hits. Plan to overinvest in equipment for the first 12 months, not optimize it.

Underwrite a 90 to 180 day TPA re-credentialing window

Even in a stock purchase, expect a 90 to 180 day period where TPA work assignments slow as the program re-credentials new ownership. Pre-fund the operating account with 90 days of payroll plus equipment depreciation. Buyers who do not budget for the credentialing window get squeezed on cash exactly when they need it most.

Financing a restoration acquisition

Capital structure varies by buyer type, but some patterns are consistent in 2026.

SBA 7(a) loans

Independent buyers and search funders commonly use SBA 7(a) financing for restoration deals up to $5M in purchase price. SBA rates are typically prime plus 2.0 to 2.75 percent, with 10-year amortization. The constraints: SBA requires the seller to exit operationally within 12 months (a problem for TPA transition), limits seller financing structures, and applies tighter scrutiny to insurance-revenue concentration. For deals where TPA continuity requires the seller to remain available for 18+ months, SBA can be a poor fit.

Commercial bank acquisition lending

Regional and community banks with home services or specialty contractor experience will lend 2.0 to 3.5x EBITDA at prime plus 1.5 to 2.5 percent. Restoration is harder than HVAC for commercial bankers because of the AR aging profile (heavy 90+ day receivables) and the insurance-claim collection risk. Banks with specialty contractor lending desks (Live Oak Bank, Pinnacle Financial Partners, Byline Bank) are typically the right starting point.

Asset-based lending

Restoration AR (especially TPA-channel receivables, which have institutional credit on the back of major carriers) is good ABL collateral. ABL facilities of 75 to 85 percent advance on eligible AR plus 30 to 50 percent on equipment can provide significant additional liquidity for working capital and equipment refresh. Worth modeling on any deal above $3M EBITDA.

Mezzanine and unitranche

For platform deals or larger independent deals ($5M+ EBITDA), mezzanine or unitranche financing bridges the gap between senior debt and equity. Rates run 10 to 14 percent with warrants. Common providers: Twin Brook, Monroe, Antares, and regional SBIC funds.

Seller financing

Often 5 to 15 percent of purchase price, subordinated, 5 to 7 year term. Rates typically 6 to 8 percent. In restoration, seller notes are particularly useful because they keep the seller economically aligned during the TPA transition window. A buyer who structures a meaningful seller note (10 percent or more) typically gets better seller support on TPA introductions.

Red flags that kill restoration deals

Some restoration deals should not close. The patterns that consistently predict post-close failure:

• TPA program on probation or with deteriorating scorecards. A TPA program one quarter from termination is worse than no TPA program at all, because the buyer is paying for revenue that is about to disappear. Always pull the most recent 4 quarterly scorecards before LOI.
• Quality of earnings reveals greater than 15 percent EBITDA adjustment. Usually from owner compensation, related-party transactions, aggressive revenue recognition on long-cycle commercial losses, or capitalization of equipment that should be expensed. A 10 to 15 percent adjustment is normal. Above that range, the diligence premium typically makes the deal uneconomic.
• Carrier concentration above 30 percent. Single-carrier dependence is a structural risk because TPA termination at one major carrier can take 40 percent of revenue overnight. Diversification is platform-grade. Concentration is a structural discount.
• AR aging concentrated in 180+ day bucket. If more than 10 percent of total AR is sitting beyond 180 days, the buyer is likely inheriting collection disputes, scope-of-work fights, or supplementing-rate problems that the seller has not surfaced.
• Lapsed IICRC certifications or expired EPA RRP. Missing certifications are a deal-killer for TPA enrollment continuity. Buyers should not close on a target that requires immediate re-certification spending and exposure to TPA suspension.
• Project manager turnover above 25 percent annually. Restoration runs on PMs. If the senior bench has been turning over, the institutional knowledge of carrier relationships and TPA scorecards is degrading. Plan for an 18 to 24 month rebuild.
• Founder personally manages the TPA portal logins. If the seller is the only person who can log into the Crawford or Sedgwick portal, you are acquiring a person, not a business. The TPA relationship needs to be institutionalized before close.

The CT Acquisitions perspective

We work both sides of the restoration market: introducing sellers to qualified buyers in our 76+ buyer network and sourcing deal flow for institutional buyers (PE platforms, family offices, search funders, strategic regional consolidators) that have engaged us. Our observations from the last 36 months of restoration M&A:

• TPA depth pays for itself. Sellers who invest in multi-TPA enrollment 18 to 24 months before sale routinely add 1.5x to 2.5x EBITDA in multiple. The investment is a few hundred thousand dollars in dedicated TPA program management and credentialing. The return is in the millions on a $2M+ EBITDA business.
• Stock sales outperform asset sales by 0.5x to 1.0x multiple in restoration. The TPA-transferability problem makes asset sales meaningfully harder to underwrite. Sophisticated buyers will pay more for the cleaner transition path. Sellers who insist on asset sales for tax reasons are leaving multiple on the table.
• Founder-dependent operators sell for less than they think. The founders who built a restoration business through their personal relationships with adjusters, public adjusters, and carrier reps are selling a person, not a business. Buyers know this and price accordingly. The 18-month management institutionalization plan before sale is worth 1.0x to 2.0x EBITDA.
• The franchise pathway is underrated. For $400K to $1.5M SDE operators, selling to another franchisee within the same system (SERVPRO to SERVPRO, PuroClean to PuroClean) is often the fastest, cleanest path. Franchise buyers know the systems, the supplier relationships, and the brand standards. The buyer pool is small but the friction is low.
• State-level catastrophe exposure matters. Florida and Texas restoration economics are dominated by hurricane and named-storm cycles. California restoration economics are dominated by wildfire and earthquake. Carolinas economics are dominated by hurricane and freezing-pipe events. Buyers underwriting national multiples without regional catastrophe modeling consistently misprice the working capital requirement and the surge-capacity infrastructure.

If you’re buying a restoration business

Whether you are a first-time search fund buyer, an independent sponsor building a restoration thesis, a franchise operator looking to expand, or a PE platform looking for add-ons, the same playbook works:

1. Write down your TPA thesis before you look at deals. Which carriers do you want exposure to. Which TPA programs do you want enrollment in. Which loss types (water, fire, smoke, mold, biohazard, contents) match your strategic objective. Every target you evaluate should be defensible against this thesis.
2. Build a deal-flow machine before you need deals. Restoration deal flow comes from direct outreach to operators identified through state contractor licensing records, relationships with TPA program managers, presence at industry events (Restoration Industry Association annual convention, IICRC events), and relationships with the small group of M&A advisors who specialize in restoration. Broker-listed deals are typically the leftover inventory after platforms have already passed.
3. Underwrite from the TPA scorecard up. The best restoration businesses are built on consistent TPA scorecard performance. Your diligence should start with the carrier-facing metrics, not the financial statements. Your integration plan should preserve the TPA-facing operations through year one.
4. Do not mistake price for deal quality. Buyers who pay 8.5x for a TPA-deep restoration platform with diversified carrier mix, IICRC certified firm status, and a project manager bench typically return capital more reliably than buyers who pay 5.5x for a founder-dependent retail-heavy operator that looks cheap on paper. The expensive deal is often the better deal in restoration.

Working with CT Acquisitions as a restoration buyer

We maintain a qualified buyer network that includes PE platform consolidators active in restoration, family offices with insurance-services thesis, independent sponsors building restoration roll-ups, and search funders targeting their first restoration acquisition. If your thesis fits the deal flow we see, we are direct, fast, and selective about the introductions we make. We do not run broad auction processes. We match founders to the small number of buyers who are right for their specific business.

For restoration buyers, this means: no wasted time on mis-fit deals, early access to TPA-enrolled targets that have not gone to market, and a sellers-first reputation that founders trust. We are paid by the buyer at close, so founders pay nothing.

If you are actively acquiring in restoration, set up a 30-minute conversation to walk us through your thesis. We will be direct about whether our deal flow fits. See the sell-side view and the broader home services framework.

Frequently asked questions about buying a restoration business

What EBITDA multiple should I pay for a restoration business in 2026?

For platform-grade restoration operators with multi-TPA enrollment, 60 percent or higher carrier-direct revenue, IICRC certified firm status, and a project manager bench, expect competitive bidding in the 8.5x to 10x EBITDA range. Retail-heavy operators with limited TPA placement transact at 5.0x to 6.5x. TPA program depth is the single factor that moves multiples most.

How long does it take to close a restoration acquisition?

From signed LOI to close, 90 to 150 days is typical, longer than HVAC because TPA re-credentialing requires parallel coordination during diligence. Deals with multi-state operations, large-loss commercial exposure, or contested AR take 150+ days.

Should I use an SBA loan to buy a restoration business?

SBA 7(a) works for restoration deals up to $5M in purchase price, with constraints. The 12-month seller exit requirement conflicts with TPA transition needs, and SBA lenders apply tighter scrutiny to insurance-receivable concentration. For TPA-deep targets, commercial bank financing with a specialty contractor desk is usually better.

What does TPA enrollment do to a restoration business valuation?

TPA enrollment is the single largest multiple driver in restoration M&A. Single-program is worth 0.5x to 1.0x EBITDA uplift versus a retail operator. Multi-program plus one or two direct carrier programs is worth 1.5x to 2.5x. Deep multi-TPA enrollment with multi-year tenure and top-quartile scorecards is worth 2.5x to 4.0x.

How do I source restoration deal flow as a new buyer?

Most effective channels in restoration, by yield: direct outreach to operators identified through state contractor licensing records and IICRC certified firm directories; relationships with TPA program managers; presence at RIA and IICRC events; specialized buy-side advisors (CT Acquisitions among them); and broker-listed deals where you compete with every other buyer.

What is the biggest mistake first-time restoration buyers make?

Underestimating TPA transition risk. First-time buyers assume program enrollment transfers automatically with the asset purchase. It does not. Re-credentialing takes 60 to 180 days, during which work assignments slow. Buyers who do not pre-negotiate the TPA transition can lose 30 to 50 percent of revenue in the first six months post-close.

How much working capital do I need for a restoration acquisition?

For a $3M EBITDA restoration business, expect to fund 15 to 25 percent of revenue in working capital at close (insurance receivables, equipment depreciation buffer, storm-surge reserve). That is meaningfully higher than HVAC. Plan on $1.5M to $3M on top of purchase price. ABL facilities can finance a significant portion.