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

👨‍🔧 Owner Dependency & Labor Risk

• Does the owner drive, dispatch, or perform recovery services personally?
• Has a market-based wage been applied for the owner’s labor hours?
• Is there a team of drivers with documented schedules and wages?
• Is a dispatcher or 24/7 coverage team in place, or owner-reliant?

📃 Contracts & Revenue Concentration

• Is revenue concentrated in police rotation or municipal contracts?
• Are contracts formal, long-term, and transferable?
• What percent of revenue comes from the top 1–2 sources?
• Is there risk of revenue loss if one contract or account ends?

🚛 Equipment, Vehicles & CapEx

• What is the age and condition of trucks, flatbeds, and equipment?
• Have CapEx needs been budgeted in cash flow projections?
• Are major repairs or replacement cycles planned/documented?
• Are vehicles owned, leased, or under finance agreements?

📊 Addbacks & Expense Adjustments

• Do addbacks include fuel cards, personal vehicle use, or repair costs?
• Are undocumented cash transactions or personal expenses included?
• Is insurance expense aligned with fleet size and age?
• Are fuel, tolls, and maintenance reconciled to route logs or fleet activity?

🚩 Red Flags

• Owner drives or dispatches without replacement compensation
• Fleet is outdated or lacks documented CapEx planning
• No diversification beyond one government or police contract
• Addbacks include vague fuel or vehicle-related expenses without receipts

📌 SBA SOP Tip

Towing company valuations must normalize for owner driving and dispatch labor, adjust for concentrated contract risk, and include realistic CapEx assumptions. Fleet replacement and staff coverage are essential for continuity and fair market value.