Buying a Towing Company and What It Costs to Buy an Existing Tow Truck Business

An existing US towing company cost a median $1,350,000 to buy across 2021 to 2025, based on closed BizBuySell sales, on median revenue of $1,332,354 and median owner earnings of $428,547. Financed with an SBA 7(a) loan at 10 percent down, the cash you bring to that purchase is about $166,894 for the equity injection and the SBA guaranty fee. Unlike most small businesses, the median towing deal leaves room under the loan. What eats that room is the fleet: trucks wear out, and the earnings a seller shows you do not pay for their replacement.

Most pages that answer this question price starting a tow business: one used rollback, insurance, a motor club application and a phone number. Buying a running company is a different purchase. You pay for call volume that already comes in, agency and motor club relationships, a lot, drivers who know the territory and a fleet that is already partly used up. The price is set by earnings. Whether you can carry it is set by the trucks and by which call sources stay after the sale.

How much does it cost to buy a towing company?

The median towing company sold for $1,350,000, which is 3.15 times its $428,547 of seller discretionary earnings and about 1.01 times its revenue. The published median multiple is 3.16x earnings, and half of all sales landed between 2.06x and 3.87x. Here the two readings agree almost exactly, which is unusual; the median price, median earnings and median multiple come from different companies, so in most sectors they drift apart.

The sold record covers light, medium and heavy-duty towing companies, many of which also do roadside assistance, recovery, law enforcement towing, impound lot operations and storage. Seller discretionary earnings (SDE) is net profit plus the owner's pay, benefits, interest, depreciation and one-time costs, the cash one full-time owner takes out. Read the price off the earnings of the company you are looking at:

Which column applies depends mostly on size, where the calls come from and the age of the fleet. BizBuySell states that a towing company generating $2.6 million in revenue may command an earnings multiple around 3.87, while a smaller tow truck company with sales below $800,000 may trade near 2.05. A two-truck light-duty company living on motor club calls sits at the bottom; a company with heavy-duty units, commercial accounts, its own lot and several call sources sits at the top. The full distribution, the yearly prices and the comparison with nine other automotive businesses are on our towing company valuation page. If the seller has handed you a profit and loss statement rather than an SDE figure, start with how to calculate SDE.

How much money do you need to buy a towing business?

On a $1,350,000 towing company financed with an SBA 7(a) loan, plan on about $166,894 for the 10 percent injection and the guaranty fee, plus working cash for fuel, insurance deposits and the first repairs. Here is the arithmetic at three price points, computed at 10 years and 10.5 percent:

The small company is the lower quartile of earnings at the lower quartile multiple; the larger one is the upper quartile of earnings priced at the median multiple. Fee tiers follow the FY2026 SBA schedule: 3 percent of the guaranteed portion on loans from $150,001 to $700,000, and on larger loans 3.5 percent of the guaranteed portion up to $1 million plus 3.75 percent above it. The fleet reserve row is our illustration, not a published figure; set your own from the truck list.

Now read the last row against the salary you need. On the median company, $181,814 is left after debt service and a $50,000 reserve, so an $80,000 salary still leaves $101,814 for a second driver, a dispatcher or a bad winter. The small company leaves $92,782, which pays a modest owner salary and little else. The larger company leaves $354,625 and can carry a manager. Towing is one of the few main street sectors where the median deal pays its owner comfortably after the loan, provided the reserve is honest.

Can you get an SBA loan to buy a towing company?

Yes, in most cases, and with more room than most sectors: the median $428,547 of earnings supports about $1,913,411 of price at an $80,000 owner draw, 41.7 percent above the median sale, before any fleet reserve. Three parts of SBA SOP 50 10 8.1, effective October 1, 2026, shape the deal.

First, the valuation. On a purchase price above $350,000 the lender must order an independent valuation from a qualified source, and any part of the price above the appraised value has to be paid with equity, not debt. Nearly every towing company that sold is above that line. Money you spend on the report counts toward your equity injection, and an equipment appraisal of the trucks usually comes with it. Our page on business valuation for an SBA loan explains what the appraiser will look at. A quality of earnings report is added at a $3 million price.

Second, the environmental review. Towing is NAICS 488410, and the SOP lists NAICS 488 in Appendix 6 as environmentally sensitive "if fuel tanks are present or if repairs or maintenance is performed on site." When a property matches that list, the investigation must begin with a Phase I, regardless of the amount of the loan. A tow yard with a fuel tank or a shop bay usually qualifies, so budget the time and the report into the closing. Third, the debt service test: the lender wants 1.25 times coverage, and a loan officer who has financed tow companies will ask how you plan to replace the trucks. Bring a fleet schedule and that conversation gets short. Our guide to using an SBA loan to buy a business covers the rest of the lender side.

Is now a good time to buy a towing company?

Prices have held while the price per dollar of earnings has come down, which favors buyers, but check the seller's margin before you trust the earnings. The median towing company sold for $1,250,000 in 2023, $1,500,000 in 2024 and $1,360,000 in 2025. Measured against median earnings, that is 3.16x, 2.60x and 2.55x. The 2021 median of $2,325,000 is an outlier: BizBuySell says a disproportionate number of larger towing operations sold that year, and median revenue at those sales was $2,696,331.

Margins are the number to watch. The median owner margin was 29.2 percent at the 2022 sales, 43.2 percent in 2024 and 25.7 percent in 2025. A company showing a 2024 margin in the forties may be presenting a peak year. Ask for three years of monthly revenue by call source, fuel and insurance cost, and storage income, and price the business on an average year rather than the best one. The listings tell the same story from the other side: towing companies for sale today ask a median 4.61x earnings, against 3.16x for the ones that sold.

What to check before you buy a towing company

The value sits in the call sources, the trucks and the lot, so diligence goes there first. The items buyers and lenders ask for most often:

• Revenue by call source for three years. Police and municipal rotation, motor clubs, private property impounds, dealers, body shops and fleet accounts, each with job counts and average ticket. If the motor club jobs and payments arrive as dispatch and remittance emails, you can pull those emails into a spreadsheet and count jobs and pay per club for twelve months before you rely on the seller's summary.
• Every rotation and motor club agreement, in writing. Many agency agreements do not survive a sale. The Unified Police Department of Greater Salt Lake rotation agreement for 2025 to 2026 says a company sold during the rotation year is terminated from the rotation, the agreement is non-transferable, and the new owner may apply for the next year. Ask each agency and club what happens on a change of owner, and price that revenue as at risk until you are approved.
• The fleet list. Every truck with year, mileage, engine hours, body type, VIN and the loan or lease balance. Have a mechanic look at the units doing the most work, and price a replacement schedule for the oldest ones.
• The lot. Owned or leased, the lease term and assignment clause, any storage facility license, regulated storage rates, and how many vehicles sit there today waiting for owners or lien sales.
• Licenses and the USDOT number. Many states and cities license tow companies, operators and storage lots, and some reissue licenses to a new owner. For trucks in interstate commerce, FMCSA guidance says a USDOT number cannot be sold or transferred, so an asset purchase usually means applying for a new one.
• Insurance and drivers. Commercial auto and on-hook loss history, driver records, and whether the drivers stay. A CDL driver at the BLS median for heavy and tractor-trailer truck drivers, $58,640 in May 2025, costs about $63,126 a year with employer FICA, before on-call pay and overtime.

Is buying a towing company better than starting one?

Buying costs more up front, but you start with calls that already come in, agency and club relationships and a lot, instead of a truck payment and an empty dispatch screen. A new tow company waits months for motor club approval and often years for a rotation spot, while the first truck loan comes due every month. A bought company with $1,332,354 of revenue hands you about $428,547 of owner earnings from the first month, and the SBA will lend against it. For someone who already drives or dispatches for a tow company, that head start is what the price pays for. Just confirm which call sources come with you, and price the trucks you are inheriting.

If you are looking at a specific listing, enter its revenue and owner earnings in the estimator at the top of this page. You get a value range against real towing company sales in a few minutes, before you pay for a broker opinion or an appraisal, and it tells you whether the asking price needs a harder conversation. The trucking company valuation page covers the freight side if the company also hauls.