Project Based Businesses

April 06, 2026

by a searcher from Florida State University in St. Petersburg, FL, USA

While I understand recurring revenue models are highly attractive to all of us, at what point does a project based business become attractive to investors and SBA lenders? I am referring to glass fabrication/installation, custom cabinets, etc… I like these types of businesses personally, but I am curious on others thoughts and experience with raising capital for this type of business and the smaller buyer pool for potential exit in the future?

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Reply by a professional-advisory
from St. Joseph's University in Tampa, FL, USA

Hey Parker! Great question...so it's layered for me... As a new Senior Associate at a capital firm focused on home services (largely because of their recession-resistant characteristics) I’ve spent a lot of time thinking about exactly this tradeoff. While recurring revenue is the gold standard, project-based businesses like glass fabrication, custom cabinetry, and similar trades absolutely become attractive once they demonstrate a few key qualities. From an SBA lender’s perspective, consistency of cash flow matters more than strict “recurring” structure. If a project-based business shows strong historical revenue stability, diversified customer sources (not overly reliant on a few contracts), and healthy margins, it can underwrite very similarly to a service business with contracts. Backlog visibility, repeat builder relationships, and referral-driven pipelines all help bridge that gap. On the equity side, working with a mix of LPs and SBA lenders, I’ve seen different appetites. Some LPs are perfectly comfortable funding alongside SBA leverage, while others, especially family offices or operators with domain expertise, may step in to fund the entire deal themselves. That tends to happen in a few scenarios: when the business has a dominant local reputation, when there’s a clear operational value-creation angle (pricing, scheduling, salesforce buildout), or when the LP has a strategic angle (e.g., rolling up adjacent trades or vertically integrating into an existing platform). As for exits, you’re right that the buyer pool can be smaller versus true recurring-revenue models. But quality project-based businesses with scale, strong margins, and institutionalized operations still trade well—especially if you can professionalize them and create some level of revenue predictability. In many cases, the “story” evolves from a project shop to a systems-driven operator, which broadens the exit universe considerably. I hope this helps!

Reply by a lender
from University of Missouri in Denver, CO, USA

I agree with the above. While recurring income is the gold standard, there can still be really worthwhile businesses that are project based. It is key to make sure there is not too much key man risk, the consistency of cash flow and stability, hopefully little to no customer concentration, etc. I think these deals are worth pursuing under the right conditions

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