How much does a Towing Business cost to buy?

A typical Towing Business sells for 3x to 4.3x seller's discretionary earnings. With estimated SDE of $108K, expect to pay roughly $324K to $464K before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a Towing Business?

Startup costs range from $50K to $200K depending on location, equipment, and scale.

Service

Towing Business

Q: What are the profit margins for a Towing Business?

The average profit margin for a Towing Business is around 27%. Major costs are truck payments and maintenance, fuel, high insurance premiums, dispatcher wages, and driver labor.

24/7 demand — breakdowns and accidents never take a day off

Bottom line

Worth studying, but do not buy without strong local proof.

Towing businesses provide vehicle recovery and transport services for breakdowns, accidents, and parking enforcement. Revenue comes from motor club contracts (AAA, etc.), police rotation lists, private property towing, and direct consumer calls. The business runs 24/7 and demand is extremely consistent.

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Acquisition score

Fair

Avg Revenue

$400K

Profit Margin

27%

Acquisition Multiple

3x - 4.3x

Startup Cost

$50K - $200K

How It Works

Revenue streams include motor club calls (AAA pays per tow), police/municipality rotation calls, private property enforcement, and direct consumer calls. A tow truck responds to calls, recovers or transports the vehicle, and charges for the service. Impound lots generate additional storage fees.

Revenue Range

Low End

$150K

Typical

$400K

High End

$1.0M

BizBite underwriting snapshot

Pass for now

Towing Business has enough high-level data for a first look, but BizBite has not assigned a category-specific operating model yet. Treat the score as preliminary.

Speculative / 100

Data confidence

medium

52/100

Financing fit

medium

Category-level fit before lender-specific diligence.

Confidence cap

Weak source data caps the final score.

Why it may work

+SBA dataset shows 12 recent comparable loans

Be careful

!Source link status has not been verified yet
!No last-checked date yet
!No category operating model yet
!No category model yet

Real Acquisitions in This Category

SBA 7(a) change-of-ownership loans · NAICS 488410 · Motor Vehicle Towing

Deals tracked

12 in last 24 mo

Median loan

$1.1M

$499K–$1.9M p25/p75

Implied deal size

$1.3M

median · ~85% LTV

Charge-off rate

—

not enough resolved loans

Deal Size Distribution

<$150K

$150K–500K

$500K–1M

$1M–2M

>$2M

Deal Flow Over Time

12-month momentum

-28.6%

deal volume vs prior 12 mo

Median loan Δ

+54.9%

5 recent · 7 prior

Financing Profile

Median rate

9.88%

17% fixed · last 24 mo

Median term

120 mo

standard 10-yr

Collateralized

of loans secured

Median jobs

supported per deal

Top lenders in this space

Newtek Small Business Finance, Inc.3

First National Bank of Pennsylvania3

First Bank2

Live Oak Banking Company2

United Business Bank2

Where deals happen

CA7

NC6

MN5

FL4

UT3

TN3

MO3

MI3

WA2

SC2

Recent Comparable Deals

Closed	State	Loan	Implied deal	Jobs	Franchise
Nov 2025	TN	$1.2M	$1.4M	6	—
Nov 2025	CA	$1.7M	$2.0M	14	—
Nov 2025	NC	$1.2M	$1.4M	25	—
Jun 2025	FL	$1.4M	$1.6M	14	—
May 2025	CA	$539K	$634K	14	—
Mar 2025	MO	$5.0M	$5.9M	32	—
Mar 2025	VA	$4.8M	$5.6M	11	—
Feb 2025	NH	$640K	$753K	6	—
Sep 2024	TX	$1.5M	$1.8M	51	—
Sep 2024	AZ	$270K	$318K	4	—

Volume rank #128/544Deal-size rank #107/544Momentum rank #266p90 loan: $3.7MData as of Mar 2026

Source: SBA 7(a) FOIA dataset, filtered to acquisitions (loans where business age is "Change of Ownership"). Implied deal size assumes an 85% loan-to-purchase ratio, a common SBA change-of-ownership structure. Charge-off rate shown only when 10+ loans have resolved (paid in full or charged off). Interest rates reflect last 24 months only. Actual deal values vary with equity injections, seller financing, and working capital terms.

Pros

+24/7 demand — vehicles break down constantly
+Multiple revenue streams (motor clubs, police, private)
+Impound and storage fees add passive income
+High barriers to entry once on police rotation lists

Cons

-24/7 on-call requirement is demanding on lifestyle
-Tow trucks are expensive ($50K-$150K each)
-Insurance costs are very high due to liability exposure

Best For

Operators who thrive in 24/7 businesses and can manage dispatch logistics

Operating Costs

Major costs are truck payments and maintenance, fuel, high insurance premiums, dispatcher wages, and driver labor.

SBA Financing Estimator

Adjust the deal — see if it cash flows after debt service

$-6052/mo

after debt service

Deal price — $1.3M

Range: $1.0M (3×) to $2.1M (4.3×+)

Down payment — 15% ($201K)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 10.00%

SBA median for this category: 9.9%

Loan term — 10 years (120 mo)

SBA median for this category: 120 months

Down payment

$201K

15% equity injection

Loan amount

$1.1M

85% SBA-financed

Monthly payment

$15K/mo

$667K total interest

Monthly profit

$9K/mo

at 27% margin

Monthly cash flow after debt service

$-6052/mo

Margin does not cover debt service at these terms. Lower the deal price, increase the down payment, or extend the loan term.

Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.