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, Code Blue) 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 Code Blue 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 Q1 2026 Atlas →The restoration research stack.
Atlas for the numbers. Playbook for the framework. Apply it to the deal in front of you.
Q1 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.
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