Verify revenue quality, workforce stability, licenses, and equipment before you close on any residential or commercial trade services acquisition.
Find Home Services Acquisition TargetsHome services acquisitions between $1M–$5M revenue require scrutiny beyond standard financials. Owner dependency, technician retention, license transferability, fleet condition, and online reputation are the variables that determine whether a deal creates value or immediate post-close problems. This guide covers every critical checkpoint.
Confirm that reported cash flow is real, recurring, and not concentrated in relationships that leave with the seller.
Request 3 years of tax returns and P&Ls. Identify and validate every add-back — owner salary, personal vehicle, health insurance — before accepting the stated SDE figure.
Separate maintenance agreement, service contract, and subscription revenue from project-based work. Recurring revenue above 30% meaningfully supports a higher multiple.
Flag any single customer exceeding 15–20% of total revenue. Residential businesses with diversified homeowner bases carry significantly lower concentration risk than commercial-heavy books.
Evaluate whether the business can operate without the seller and whether technicians will stay post-close.
Determine what percentage of customer relationships, technical decisions, and vendor relationships run exclusively through the seller. High dependency reduces transferable value significantly.
With seller permission, speak with lead technicians. Assess tenure, compensation relative to market, and whether key employees are aware of and comfortable with the pending transition.
Identify the field service management platform in use — ServiceTitan, Jobber, Housecall Pro. Fragmented or manual systems signal post-close integration costs and operational risk.
Confirm all licenses, insurance, and physical assets are transferable and in compliant, working condition.
Confirm state and local licenses for HVAC, plumbing, electrical, or pest control are current. Determine whether licenses are tied to the seller personally and require a new qualifier post-close.
Review maintenance logs, age, and mileage on all vehicles and major equipment. Estimate near-term capex exposure — deferred maintenance on a 10-truck fleet can exceed $150K quickly.
Confirm general liability, workers comp, and bonding are active and transferable. Request a 5-year claims history. Open claims or lapses are red flags for both buyers and SBA lenders.
Verify the Home Services acquisition qualifies for SBA financing, the purchase price is supportable by the verified cash flow, and the deal structure protects the buyer's downside.
Confirm the Home Services meets SBA 7(a) eligibility requirements: the business is for-profit, U.S.-based, within SBA size standards, and the buyer meets personal financial requirements. Some industries have specific SBA restrictions — verify before LOI.
Model verified normalized EBITDA against projected SBA loan payments at current rates. A $1M SBA 7(a) loan at 10.5% over 10 years costs approximately $13,000/month. The Home Services must generate at least 1.25x debt service coverage after a market-rate manager salary to pass underwriting.
Confirm the seller note is properly subordinated to the SBA loan and goes on 24-month standby as required by SBA rules. If an earnout is included, define exact measurement metrics, time period, and dispute resolution process before signing the purchase agreement.
Before signing a Letter of Intent, request these documents from the seller. Missing or incomplete items are a red flag — not a reason to proceed without them.
Request a full contract list with customer names, contract values, and renewal dates. Cross-reference against invoicing history in the field service management system and confirm contracts are legally assignable to the buyer.
Owner dependency is the most common value destroyer. If the seller holds all key customer relationships and technical licenses personally, buyers face immediate revenue attrition and potential license gaps the moment the seller exits.
Yes. Home services businesses are among the most SBA-eligible acquisition targets. Lenders favor established operations with 2+ years of history, positive cash flow, and asset collateral from vehicles and equipment to support the loan.
Expect 45–75 days from signed LOI to close. License verification, fleet inspection, and customer concentration analysis are the most time-intensive steps and should begin immediately after the LOI is executed.
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