Verify fleet condition, DOT compliance, worker classification, and customer contracts before you close on any moving business acquisition.
Acquiring a moving company in the $1M–$5M revenue range offers strong cash flow potential, but the asset-heavy, compliance-intensive nature of this industry creates hidden risks that can erase returns quickly. Aging trucks, DOT violations, misclassified contractors, and seasonal revenue swings are common in owner-operated moving businesses — especially those built over 10–30 years by a single founder. This checklist walks buyers through the five most critical due diligence areas: fleet and assets, regulatory compliance, financials and earnings quality, customer and contract risk, and insurance and liability history. Work through each category systematically before submitting a final offer or releasing SBA loan conditions.
Moving company value is tied directly to the working condition of its trucks. Deferred maintenance and aging fleet assets can create six-figure capital requirements within 12 months of closing.
Request maintenance logs and mileage records for every truck in the fleet.
Documents true condition and predicts near-term repair or replacement costs post-close.
Red flag: Missing or inconsistent maintenance records suggest deferred upkeep and hidden capex exposure.
Commission an independent mechanic inspection on all vehicles before closing.
Identifies hidden mechanical issues not visible in financial statements or seller disclosures.
Red flag: Seller refuses third-party inspection access to any truck in the fleet.
Confirm vehicle titles are free and clear or document any liens on fleet assets.
Encumbered titles complicate asset purchase structures and SBA lender approval.
Red flag: Undisclosed liens or missing titles on one or more vehicles.
Estimate fleet replacement schedule based on age, mileage, and condition ratings.
Quantifies true capex runway and informs post-close working capital needs.
Red flag: More than half the fleet exceeds 200,000 miles with no replacement plan in place.
Moving companies operate under federal FMCSA and state DOT authority. Violations, lapses, or non-transferable licenses can halt operations immediately after acquisition.
Verify active FMCSA operating authority and confirm it is transferable to a new owner.
Operating without valid authority exposes the buyer to fines and forced service interruption.
Red flag: Operating authority is in individual owner's name and not transferable via asset purchase.
Pull the company's FMCSA Safety Measurement System (SMS) scores and CSA data.
Elevated SMS scores indicate systemic safety issues and potential regulatory intervention risk.
Red flag: Any FMCSA out-of-service orders, conditional safety ratings, or open violations in the past 24 months.
Confirm all drivers hold valid CDLs and current DOT medical certifications.
Unqualified drivers create immediate liability and violate federal operating requirements.
Red flag: Any driver operating without a valid CDL or expired DOT medical card on file.
Review state-level moving licenses, tariff filings, and local business permits for transferability.
State licensing requirements vary and non-transferable permits can delay post-close operations.
Red flag: Key state permits issued to the seller personally with no clear transfer mechanism.
Owner-operated moving businesses frequently commingle personal expenses, rely on cash-basis accounting, and obscure true EBITDA. Recast financials are essential for SBA underwriting and valuation.
Obtain three years of tax returns, P&Ls, and bank statements for side-by-side comparison.
Identifies revenue underreporting, expense inflation, and owner add-back legitimacy.
Red flag: Significant gaps between reported revenue on tax returns and P&L statements.
Identify and document all owner add-backs including compensation, personal vehicles, and benefits.
Accurate SDE or EBITDA recast drives valuation and SBA loan sizing.
Red flag: Add-backs exceed 30% of stated EBITDA without clear documentation for each line item.
Analyze monthly revenue by season to assess peak concentration and off-season cash burn.
Summer-heavy revenue cycles create working capital gaps in Q1 and Q4.
Red flag: More than 60% of annual revenue concentrated in May through August.
Confirm accounts receivable aging and identify any overdue corporate or commercial balances.
Slow-paying commercial accounts inflate revenue without corresponding cash collection.
Red flag: AR aging shows balances over 90 days representing more than 15% of total receivables.
Corporate relocation accounts and military contracts drive recurring revenue but create dependency risk. Residential customer mix and referral source diversity must be evaluated carefully.
Request a full customer revenue breakdown by account for the trailing 24 months.
Identifies dangerous concentration in single accounts that may not survive ownership transition.
Red flag: Any single customer represents more than 25% of total annual revenue.
Review all written corporate relocation and military contracts for assignment clauses.
Non-assignable contracts can terminate automatically upon a change of ownership.
Red flag: Key contracts contain change-of-control clauses requiring customer consent to assign.
Assess the owner's personal role in corporate account relationships and referral sources.
Owner-dependent relationships frequently erode within 6–12 months of exit.
Red flag: Top three accounts have no contact with anyone other than the seller personally.
Evaluate online reputation across Google, Yelp, and moving-specific platforms like Moving.com.
Ratings below 4.0 stars or recent negative review patterns signal service quality decline.
Red flag: Average rating below 4.0 stars or a cluster of unresolved cargo damage complaints.
Moving companies carry significant liability exposure from cargo damage, workers' comp claims, and driver injuries. Misclassified contractors add material legal and tax risk for incoming buyers.
Obtain five years of loss runs from all insurance carriers covering cargo, auto, and general liability.
Loss history predicts future insurance costs and reveals patterns of recurring claims.
Red flag: Workers' comp experience mod rate above 1.25 or more than two large cargo claims in three years.
Review worker classification for all movers and drivers — employees versus independent contractors.
Misclassified workers create IRS back-tax liability and state labor penalty exposure for the buyer.
Red flag: Drivers paid as 1099 contractors who follow fixed schedules and use company trucks.
Confirm current cargo liability and released value coverage levels relative to move revenue.
Underinsured cargo exposure can produce single-incident losses exceeding annual EBITDA.
Red flag: Cargo coverage limits below $100,000 per shipment for a business moving high-value commercial goods.
Request documentation of any pending or settled litigation related to employee injuries or cargo claims.
Undisclosed claims can become buyer liability in an asset purchase if not properly excluded.
Red flag: Any unresolved litigation, OSHA citations, or unpaid cargo claim judgments against the business.
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Most moving company acquisitions under $5M use an SBA 7(a) loan with 10–20% buyer equity injection. Sellers frequently carry a note for 10–15% of the purchase price to bridge the gap between appraised value and loan proceeds. The asset-heavy nature of moving businesses — trucks, equipment, and real property — provides SBA lenders with tangible collateral, which supports approval. Buyers should expect lenders to require a fleet appraisal and DOT compliance verification as loan conditions.
Hire an independent commercial vehicle inspector or diesel mechanic to inspect every truck in the fleet before closing. Request the full maintenance log, oil change history, and any warranty records from the seller. Cross-reference each vehicle's VIN against FMCSA inspection records, which are publicly available, to identify any prior out-of-service violations. Budget conservatively — assume $15,000–$40,000 per truck for near-term repairs or replacement if the fleet averages more than seven years in age.
Deferred capital expenditure on aging trucks is the most common financial surprise for moving company buyers. A fleet of six trucks averaging 150,000+ miles can require $150,000–$250,000 in replacement capital within 18 months of closing, which eliminates year-one cash flow if not modeled into the deal structure. Buyers should request an independent fleet appraisal, build a truck replacement reserve into their post-close operating budget, and negotiate purchase price adjustments or seller warranties tied to fleet condition at close.
FMCSA operating authority is registered to a legal entity or individual, not to the business assets themselves. In an asset purchase — the most common structure for SBA-financed acquisitions — the buyer must apply for new operating authority under their own entity rather than assuming the seller's. This process typically takes 20–30 days and requires proof of insurance on file with FMCSA before authority activates. Buyers should initiate the authority application immediately after LOI execution to avoid any gap in licensed operating status at close.
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