Buying a Servpro franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 90 7(a) loans to buy an existing Servpro (classified mostly as Remediation Services), totaling $92.9M. The median loan was $500,000, 23% lower than the $645,250 median for all SBA-financed acquisitions. 18 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Servpro resale loans landed between $300,000 and $1,699,875.
- Lender experience exists. Live Oak Banking Company alone has financed 42 Servpro resales.
- Guaranty. The SBA guaranteed 75% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Servpro resale
The median SBA 7(a) loan for a Servpro resale was $500,000 across 90 loans (FY2018 to FY2026). Live Oak Banking Company, Stearns Bank National Association and First Bank have financed the most Servpro resales. Of 45 seasoned loans (FY2018 to FY2021), 6.7% were charged off, 89% higher than the 3.5% average for all SBA acquisition loans.
Servpro acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 4 | $1.5M | $382,500 | |
| FY2019 | 8 | $3.1M | $334,500 | |
| FY2020 | 14 | $13.2M | $590,000 | |
| FY2021 | 19 | $20.8M | $540,000 | |
| FY2022 | 13 | $12.3M | $500,000 | |
| FY2023 | 10 | $11.5M | $535,000 | |
| FY2024 | 4 | $8.7M | $2,348,000 | |
| FY2025 | 8 | $7.7M | $577,100 | |
| FY2026 | 10 | $14.1M | $696,500 |
How often do these acquisition loans fail?
Of the 45 Servpro acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 3 have been charged off by the SBA, a rate of 6.7% by loan count and 1.7% by dollars. 27 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Servpro is 89% higher than the acquisition-loan average. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing Servpro resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 42 | 46.7% | $40.5M | |
| 2 | Stearns Bank National Association | 7 | 7.8% | $2M | |
| 3 | First Bank | 5 | 5.6% | $4.8M | |
| 4 | The Huntington National Bank | 4 | 4.4% | $6.1M | |
| 5 | CIBC Bank USA | 3 | 3.3% | $5M | |
| 6 | The Bancorp Bank National Association | 3 | 3.3% | $4M | |
| 7 | Meridian Bank | 2 | 2.2% | $6.2M | |
| 8 | Regions Bank | 2 | 2.2% | $2.7M | |
| 9 | Clear Lake Bank & Trust Company | 2 | 2.2% | $1.6M | |
| 10 | Village Bank and Trust, National Association | 2 | 2.2% | $213K |
States where Servpro units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | North Carolina | 13 | 14.4% | $15.1M | |
| 2 | Texas | 12 | 13.3% | $7.3M | |
| 3 | California | 10 | 11.1% | $6.5M | |
| 4 | South Carolina | 9 | 10.0% | $7.2M | |
| 5 | Florida | 7 | 7.8% | $11.6M | |
| 6 | Illinois | 5 | 5.6% | $4.1M | |
| 7 | Arizona | 4 | 4.4% | $4.9M | |
| 8 | Pennsylvania | 3 | 3.3% | $8.8M | |
| 9 | New Hampshire | 3 | 3.3% | $3.8M | |
| 10 | Iowa | 3 | 3.3% | $2.4M |
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How lenders classify Servpro
Lenders code each loan to a NAICS industry. For Servpro the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Remediation Services | 22 | 24.4% | $31.3M | |
| 2 | Other Services to Buildings and Dwellings | 15 | 16.7% | $9.3M | |
| 3 | Residential Remodelers | 14 | 15.6% | $11.9M | |
| 4 | All Other Specialty Trade Contractors | 11 | 12.2% | $10.4M | |
| 5 | Carpet and Upholstery Cleaning Services | 10 | 11.1% | $14.6M |
Questions buyers ask
How much do buyers borrow to buy a Servpro franchise?
The median SBA 7(a) loan for a Servpro resale was $500,000 across 90 loans (FY2018 to FY2026). The middle half of loans ran from $300,000 to $1,699,875. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Servpro acquisitions?
Live Oak Banking Company has made the most SBA acquisition loans for Servpro (42, 47% of the total). Stearns Bank National Association, First Bank, The Huntington National Bank follow.
What interest rate and term do Servpro acquisition loans carry?
The average initial rate at approval was 7.07% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Servpro resale riskier than other SBA-financed acquisitions?
In the seasoned cohort (FY2018 to FY2021), 6.7% charged off, 89% higher than the 3.5% average for all SBA acquisition loans.
Where are Servpro units being bought with SBA loans?
North Carolina (13), Texas (12), California (10), South Carolina (9), Florida (7). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Remediation Services acquisitions
- North Carolina acquisitions
- Texas acquisitions
- California acquisitions
- Live Oak Banking Company
- Stearns Bank National Association
- First Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Servpro" (franchise code S1555). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.