Towing companies took 325 SBA 7(a) loans between October 2023 and June 2026, about $125 million from 104 lenders. The median loan was $100,000, below the national $150,300, but 39 loans (12%) reached $1 million, and 48.9% went through SBA Express. The 19 purchases of existing companies had a median of $788,100 at 9.25%. Lenders value the trucks as collateral, then underwrite where the calls come from, whether the permits and contracts survive a change of owner, and whether the company can keep its insurance.
| Measure | Motor Vehicle Towing | All industries |
|---|---|---|
| SBA 7(a) loans approved | 325 | 162,355 |
| Median loan | $100,000 | $150,300 |
| Middle half of loans | $40,000 – $350,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 12% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 8.85% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 19 (5.8%) | 16,849 (10.4%) |
| Median acquisition loan | $788,100 | $693,000 |
| Lenders that made these loans | 104 | 1,648 |
| SBA 504 loans (real estate, equipment) | 38 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 325 (Oct 2023 – Jun 2026)
- Lenders that approved one
- 104
- Median loan
- $100,000 (national $150,300)
- Loans of $1 million or more
- 39 (12%)
- SBA Express share
- 48.9%
- Acquisitions
- 19 loans (5.8%), median $788,100 at 9.25%
Two kinds of towing loan
Motor vehicle towing (NAICS 488410) covers light-duty towing, roadside service, impound and storage, and heavy-duty recovery. From 1 October 2023 to 30 June 2026 it took 325 SBA 7(a) loans worth $124,588,600 from 104 lenders.
The spread of loan sizes is unusually wide. The middle half ran from $40,000 to $350,000, yet the top tenth started at $1,206,620. In practice these are two different markets. At the bottom is an operator adding a rollback or covering working capital, usually through SBA Express, which accounts for 48.9% of loans. At the top are buyers of whole companies, operators buying the yard they store vehicles on, and heavy-recovery fleets with rotators that cost as much as a small building.
| Figure | Towing | National | What it tells you |
|---|---|---|---|
| Median loan | $100,000 | $150,300 | A truck, a bed, a season's working capital |
| Middle half | $40,000 to $350,000 | Most loans are single-truck or single-need | |
| Top tenth starts at | $1,206,620 | Fleets, yards and company purchases | |
| Loans of $1 million or more | 39 (12%) | A large tail for so small a median | |
| Median rate | 10.5% (middle half 8.85% to 11.5%) | 10.25% | Wide: small Express loans price high, large secured ones low |
| Fixed-rate share | 29.5% | Nearly three in ten; truck borrowers value a known payment | |
| SBA Express | 48.9% of loans | Close to half go through the lender's own process | |
| Acquisitions | 19 loans (5.8%), median $788,100 | 10.4% of loans | Fewer purchases, but large ones |
| Start-ups | 6.5% of loans | Lenders want a record of calls and contracts first |
Where the calls come from, and what a lender makes of each
Two towing companies with the same revenue can be very different credits. The underwriter's first question is the mix.
| Revenue source | Why it is attractive | What the lender checks |
|---|---|---|
| Police or municipal rotation, or a city tow contract | Steady volume and storage fees behind it | Whether the position is tied to the owner, and when the contract is rebid |
| Motor clubs and roadside-assistance networks | Large, predictable call volume | Rates set by the network, payment terms, concentration in one club |
| Private-property impounds | Paid by the vehicle owner before release | Local fee caps, disputes, signage and consent rules |
| Heavy-duty recovery and commercial accounts | High ticket per job, often insurer-paid | Receivable aging, dependence on a few fleets or insurers |
| Storage fees and lien sales of abandoned vehicles | Earns while vehicles sit | Regulated fee schedules, how long the lot takes to clear |
A company with a strong rotation position and a mix of cash-paid impounds and commercial accounts is a better credit than one with most of its calls from a single motor club, even at identical margins, because the club can cut its rates or its dispatches. Where one source is a large share of revenue, lenders treat it the way they treat customer concentration in any business.
The trucks: SBA or equipment finance
Wreckers, rollbacks and rotators hold their value better than most small-business equipment, and they have titles a lender can hold. That gives a towing company a choice most service businesses lack. An equipment lender will finance a truck against the truck, often on a fixed rate; Transparent's book holds 244 lenders that write equipment. A 7(a) loan can finance the same truck for up to 10 years, or 15 if its useful life supports it, and can fold in working capital, a yard or a refinance in one loan.
The fixed-rate share, 29.5%, suggests many towing borrowers ask for the certainty an equipment loan would give. The honest comparison is on total cost and flexibility, not rate alone: see equipment financing vs SBA 7(a). For a larger loan, the lender will want the fleet appraised; orderly liquidation value, not replacement cost, is what it lends against.
Bring a fleet list with each truck's year, make, VIN, mileage, lienholder and payoff. It is the first thing an underwriter asks for in towing, and it is often missing.
Insurance, permits and the yard
Three things outside the financial statements can end a towing business, and lenders ask about all three.
- Insurance. Commercial auto, on-hook and garagekeepers cover are expensive in towing and not always renewed. Lenders ask for current declarations and loss runs, and will be named as loss payee on financed trucks. A company that has changed carriers several times will be asked why.
- Permits and rotation eligibility. Many cities and counties license tow operators and set conditions to stay on the rotation list: response times, storage capacity, driver checks. A lapsed permit is lost revenue the next day.
- The storage yard. It has to be zoned for vehicle storage, secured, and large enough for the contracts. If it is leased, the lease term should run at least as long as the loan. If it is being bought, the real estate share can carry a term of up to 25 years.
Buying a towing company
The 19 change-of-ownership loans had a median of $788,100 at a median 9.25%, over a point below the industry median. A purchase brings trucks, a yard, drivers and a call history, and lenders price that more comfortably than a single-truck operator's working capital.
The underwriting turns on what transfers. Trucks and a yard transfer with a bill of sale and a deed. Rotation positions, municipal contracts and motor-club agreements may not: some are personal to the owner, some require the buyer to reapply, and some let the counterparty terminate on a change of control. Lenders want each one confirmed before closing; see change-of-control consents.
SBA's rules then apply. The buyer injects at least 10% of total project costs. A seller note counts toward half of that only if it is on full standby for the life of the loan; a note being paid is debt and counts in debt service. SBA prohibits an earnout to the seller, so a price that depends on the rotation positions carrying over has to be settled before closing, not paid later. The seller may consult for up to 12 months, or 24 under SOP 50 10 8.1 from 1 October 2026, which helps when the seller's relationships with police departments and dispatchers need handing over. Because SBA requires an independent valuation only where the amount financed, less appraised real estate and equipment, exceeds $250,000, a fleet-heavy deal with appraised trucks may fall under the threshold even when the price is well above it, though a lender may still order a valuation on its own account. From 1 October 2026, every change of ownership also needs financial due diligence and 1.25x coverage on historical results.
Cash advances and refinancing
When a towing company has a merchant cash advance on its books, it was often taken to put a truck on the road or cover an insurance down payment. SBA will not refinance an active advance. From 1 October 2026 an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. Truck loans and other term debt can be refinanced with a 7(a) if the new payment is at least 10% lower and the debt has been current for the last 12 months. Where an advance is the problem, the route out usually runs through a conventional or private lender first; see MCA refinance and refinancing cash advances for trucking companies.
Preparing a towing company's file
- Business tax returns for 2–3 years, personal returns and a personal financial statement for each 20%+ owner.
- A P&L, a year-to-date P&L through last month-end, and a balance sheet.
- A debt schedule with every truck loan, lease and advance, and copies of the notes being refinanced.
- The fleet list, with titles and payoffs.
- Revenue by source (rotation, motor clubs, impounds, commercial), and the contracts and permits behind each.
- Insurance declarations and loss runs.
- For a purchase: the target's latest full year of figures and the letter of intent.
Once the documents are in, Transparent builds the lender package in a day: the financing model, the lender presentation, a blind teaser and an underwriting memo that explains the call mix and the permits in the terms an underwriter needs. Transparent charges nothing before a loan closes, and on SBA loans the lender pays Transparent, not the borrower.
Common questions
- Can I buy a tow truck with an SBA Express loan?
- Yes, and 48.9% of towing loans were Express. Express goes up to $500,000 with a 50% guaranty, so lenders tend to price it higher than a standard 7(a). For a single truck, compare it with an equipment loan against the truck.
- Do police rotation spots transfer when I buy a towing company?
- Often not automatically. Many are tied to a permit or the owner and require the buyer to apply or be approved. Lenders want written confirmation before closing.
- Will a lender count storage fees as revenue?
- Yes, when the P&L and bank statements show them and the fee schedule is lawful where the yard operates. Lenders look at how long vehicles sit and how many end in lien sales.
- Is an equipment loan cheaper than SBA for trucks?
- Sometimes. Compare the total cost and flexibility: an equipment loan is limited to the truck, while a 7(a) can combine trucks, working capital and a yard, on terms of up to 10 years for equipment, or 15 if its useful life supports it.
- Can SBA refinance my truck loans?
- Yes, if the new payment is at least 10% lower and the loans have been current for the last 12 months. SBA will not refinance an active merchant cash advance.