Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

Owner Dependency + Route Risk

• Does the owner run most or all service routes?
• Has their compensation been normalized to reflect market wages for a technician?
• Are there salaried technicians or support staff in place?
• Will customers remain after the owner exits?

Recurring Revenue + Contract Review

• Are contracts month-to-month, annual, or verbal?
• Is recurring revenue clearly separated from one-time jobs?
• What percentage of revenue is subscription-based or pre-paid?
• Have cancellation or churn rates been reviewed?

CapEx and Vehicle Review

• Are service vehicles owned, leased, or omitted from valuation?
• Are sprayers, bait stations, foggers, etc., included and appraised?
• Has normalized CapEx been included in free cash flow?
• Are any major replacements or upgrades deferred?

Red Flags

• Addbacks for personal vehicle/phone with no staff coverage
• High goodwill assigned to a one-person business
• Overreliance on seasonality or weather spikes

SBA SOP Tip

Recurring revenue should be supported by transferable systems, not just relationships. Adjust for labor, CapEx, and increased risk associated with informal contracts.