Restoration business acquisitions sit in a 2.5×–4.5× SDE band. Top-of-band placement requires durable insurance TPA relationships, documented billing cycle clarity, and franchise-agreement transferability.
of deals recognized revenue before insurance settlement, creating AR timing gaps. Cash SDE can be 20–35% lower than accrual SDE in the trailing period.
Band stable. TPA program status (Alacrity, Contractor Connection, SteadyState) held by entity vs. owner is the top-of-band differentiator.
SBA fall-through cause: AR timing adjustment under lender cash-basis underwriting reduces DSCR below 1.25× in majority of accrual-basis deals.
of deals had TPA program registrations in the owner's personal name, not the entity. Non-transferable — requires re-application after close.
The accrual vs. cash DSCR gap is the defining underwriting challenge in restoration deals — and it is not a lender quirk, it is lender policy. SBA underwriters are required to work from cash-basis SDE. A restoration business running $600K accrual SDE may have $420K cash-basis SDE once AR timing is normalized. The gap is not a red flag — it is structural to the business model. The issue is when sellers present the accrual number without the adjustment, and lenders discover the gap at commitment.
TPA program registration in the entity name is non-negotiable for upper-band placement. Alacrity, Contractor Connection, and SteadyState are the three most common TPA programs in the SMB restoration segment. In all three cases, the vendor approval is registered to the company entity, not an individual — but only when the original application was filed that way. If the owner registered as an individual DBA, the approval does not transfer. Verify the registration form before LOI.
Read the full Q2 2026 Atlas →The restoration research stack.
Atlas for the numbers. Playbook for the framework. Scored Listings for the evidence.
Q2 2026 Industry Atlas
Trailing-12-month band, structural conditions, sources, and methodology. Quarterly. Dated. Citable. Built to be forwarded by lenders.
Underwriting Playbook
The four-pillar lens applied to restoration business acquisitions. Structural failure modes. Pre-LOI verification priorities. Master spoke for the vertical.
Scored Listings
Anonymized observations from real restoration deals evaluated against the framework. Updated as deals warrant. Each listing its own citable URL.
Three recent restoration deals.
Franchise restoration business, TPA held by entity, IICRC-certified staff, AR under 55 days
OutcomeSigned at 4.0× SDE. Lender DSCR 1.28× on cash-basis SDE. Franchisor approved transfer. Closed without repricing.
Independent restoration business, TPA partially owner-registered, AR cycle 74 days
OutcomeInitial ask 4.2× broker SDE. After franchise royalty correction, accrual-cash adjustment, and TPA partial-loss discount, adjusted SDE declined 31%. Repriced to 3.1× adjusted SDE. State Farm TPA re-qualification risk priced into seller note structure. Closed at 3.1× with $80,000 seller note contingent on TPA re-qualification.
Independent restoration contractor, TPA non-transferable, AR timing gap kills DSCR
OutcomeBuyer submitted LOI at 3.6× accrual SDE. After cash-basis adjustment, disputed AR exclusion, and supplement settlement restatement, adjusted SDE declined 52%. DSCR on adjusted SDE was 0.87×. Financing declined. Deal terminated.
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- Q2 20262026 Multiples Band, Structural Conditions, and the Underwriting LensMay 2, 2026Read →
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