The short answer: Funeral homes in the $1–5M revenue cohort price at 0.57–0.99× revenue (Peak Business Valuation averages): a smaller-town home at $1M of revenue runs $570,000–$990,000, a mid-size $2.5M home $1.43M–$2.48M, a $5M home $2.85M–$4.95M. The same cohort maps to 1.99–3.22× SDE. With an SBA 7(a) loan the 10% injection on total project cost is about $120K on a $1.2M home, half coverable by a standby seller note, so your cash can start near ~$60,000. One check comes before any of it: whether the pre-need book is fully funded.
What funeral homes actually cost
Demand is demographic and local, which holds the revenue multiple high for Main Street:
| Home | Revenue | Implied SDE | Typical price |
|---|---|---|---|
| Smaller-town home | $1M | ~$250K | $570K–$990K |
| Mid-size home | $2.5M | ~$600K | $1.43M–$2.48M |
| Larger home | $5M | ~$1.1M | $2.85M–$4.95M |
Property condition decides the top or bottom of the band on smaller homes, and above roughly $5M of revenue consolidators become the competing bidders and EBITDA pricing takes over. The industry-specific asterisk on every price: pre-need contracts, funerals already sold for future delivery, are an asset only when fully funded in trust or insurance, and a hidden debt when they are not.
How the price is set: the multiple
The revenue multiple carries the pricing. On the mid-size $2.5M-revenue home:
| Multiple | Implied price | When it applies |
|---|---|---|
| 0.57× (low) | $1,425,000 | Deferred property capex, underfunded pre-need, fading community presence |
| 0.78× (middle) | $1,950,000 | Stable case volume, funded pre-need, maintained property |
| 0.99× (high) | $2,475,000 | Strong reputation, priced cremation options, licensed staff staying |
Same revenue, a $1,050,000 swing, the widest of any vertical on this site, because reputation and pre-need funding are binary risks priced hard. See the sourced ranges on the funeral home multiples data page and the mechanics in valuation.
Buy the community's trust and a funded pre-need book. Everything else is a building with parking.
The down payment and the full capital stack
Under SBA 7(a) rules, a change of ownership needs a minimum 10% equity injection, calculated on the total project cost, the price plus financed fees, not on the loan amount. Up to half of it can be a seller note on full standby, and the injection cannot come from borrowed funds. The worked stack on a $1,200,000 funeral home:
| Source / use | Amount | % of price |
|---|---|---|
| SBA 7(a) bank loan | $1,080,000 | 90% |
| Your cash injection | $60,000 | 5% |
| Seller note (full standby) | $60,000 | 5% |
| Purchase price | $1,200,000 | 100% |
| + Est. closing costs & fees (financed) | ~$40,000 | |
| + Working-capital reserve | $50K–$80K |
The honest cash to close is the ~$60,000 injection plus reserves. The injection is calculated on the total project cost and cannot be borrowed. Where the home's real estate transfers, the property is appraised and financed alongside the business, and its deferred capital, a roof, a parking lot, a chapel renovation, belongs in your cash plan, not in goodwill.
Does the deal cash-flow?
At ~$600K SDE and roughly $180K of annual debt service on a $1.14M financed total, coverage sits near 3×, among the strongest on Main Street, which is exactly why consolidators compete for the bigger homes. Check any structure against a DSCR of ~1.15× to 1.25× before you sign anything.
Costs buyers forget
- Pre-need funding gaps, reconcile every contract to its trust or policy; the shortfall is a debt you are buying.
- Property appraisal and deferred capex, the building usually transfers; its roof and lot are near-term cash.
- SBA guarantee & packaging fees, a percentage of the guaranteed amount, usually financed.
- Legal & closing, purchase agreement, trust transfers, licensing assignments.
- Licensed-staff retention, the director and embalmer staying through transition carry the reputation.
- Working capital, case volume is steady but lumpy; the buffer smooths the months between.
Model your funeral home deal end to end
Price, down payment, loan payment, and take-home in one place.
Frequently asked questions
Homes in the $1–5M revenue cohort price at 0.57–0.99× revenue on Peak Business Valuation averages: $570K–$990K at $1M of revenue, $1.43M–$2.48M at $2.5M, $2.85M–$4.95M at $5M. Pre-need funding and property condition set the position in the band.
An SBA 7(a) purchase needs a 10% equity injection on the total project cost, about $120,000 on a $1.2M home. Up to half can be a standby seller note, so your own cash can start near $60,000 plus closing costs and reserves.
They are funerals already sold for future delivery. Fully funded in trust or insurance, they are locked-in future cases and support the price. Underfunded, they are services you must deliver at your own cost, a hidden debt to subtract from any offer explicitly.
At 0.57–0.99× revenue it sits well above most Main Street sectors because demand is demographic rather than cyclical and local reputation holds share for decades. The diligence checks whether this specific home still holds both.
Sources
- Multiples, Peak Business Valuation, Valuing a Funeral Home ($1–5M cohort); Acquisition Ace funeral home multiples.
- Size-band prices derived from the sourced 0.57–0.99× revenue multiple at the stated revenues.
- Financing structure & equity injection, SBA 7(a) program; SOP 50 10 8. See our SBA loan guide.
