How to Sell a Restoration or Cleaning Business: Preparing Buyers and Their Lenders
Many buyers of a restoration or cleaning company finance part of the purchase, so a sale depends not only on finding the right buyer but also on that buyer’s lender being comfortable with the business. Owners who want to sell a restoration company can improve their chances of a smooth closing by preparing the financial records, job source data, receivables history, compliance documents and team that buyers and lenders will want to review.
This article is general guidance for owners of existing, operating restoration, remediation and cleaning companies. Every sale is different, and sellers should work with qualified attorneys, accountants, tax advisors and, where appropriate, business brokers or valuation professionals. Nothing here is legal, tax or financial advice.
Start Preparing Early
Time allows an owner to clean up records, document where work comes from, reduce dependence on themselves and address issues that could concern a buyer or lender.
Organize the Financial Records
- Several years of tax returns and financial statements that reconcile with each other
- Revenue by service line, job source and month
- Receivables aging and collection history
- Documentation for any personal or one-time expenses you expect a buyer to add back
- A complete schedule of existing debt
Buyers will also want to understand whether any year was boosted by a storm or unusual event. Our guide to restoration company valuation explains how earnings are evaluated.
Document Where Work Comes From
Buyers will ask where jobs come from and how concentrated those sources are. Prepare revenue by referral source, property manager, commercial client and program relationship. Be candid that insurer or program relationships, preferred-vendor status and certifications may not transfer to a new owner. See our article on restoration referral sources.
Organize Commercial Cleaning Contracts
If the company performs contract cleaning, gather each significant contract, note termination and assignment provisions and identify any customer consents that may be needed.
Prepare Licensing and Compliance Records
Buyers will review licenses, registrations, written procedures, job files, insurance and complaint history. Identify any license or certification that depends on you personally and consider how it could be handled after you leave, with guidance from qualified professionals. See our article on remediation business compliance.
Reduce Owner Dependence
Buyers place more confidence in a business that can run without its owner. Steps that may help include developing a general manager, introducing project managers to key referral sources, documenting processes and building a stable, certified team. See our guide to restoration employee retention.
Prepare for Due Diligence
Buyers will examine financial records, job sources, receivables, contracts, licensing, equipment, vehicles, facilities and insurance. Gathering these materials in advance can reduce delays. Our restoration company due diligence checklist shows what buyers typically request.
Understand What Lenders Need From the Seller
The buyer’s lender may ask for information only the seller can provide, such as tax returns, financial statements, receivables reports and licensing details. Some loan programs also have rules about the seller’s continuing involvement after closing. Responding completely helps keep financing on track, though timing depends on the lender and the transaction.
Consider Deal Structure and Seller Financing
Sellers should consider whether they would accept part of the price over time or terms tied to post-closing performance. A seller note can help a buyer complete financing. See our article on restoration business seller financing and earnouts.
Protect Staff and Relationships During the Sale
Confidentiality matters. Premature news of a sale can unsettle technicians, project managers and referral sources. Many sellers share information under confidentiality agreements, announce the sale when closing is near and then personally introduce the new owner to staff and key relationships.
US Professional Funding helps qualified buyers finance the acquisition of existing, operating restoration and cleaning companies, which can help sellers reach a closing. Learn more about our restoration business acquisition financing.
