Independent Insurance Agency Acquisition & SBA Underwriting Financial Model — Commission Retention, Contingency Exclusion, DSCR (Excel + Google Sheets)

Buy an independent insurance agency and underwrite it the way an SBA lender actually will — not the way the broker's add-back sheet wants you to. This is a lender-ready acquisition model for a single P&C agency, built around the two things a real underwriter tests and a broker quietly overstates: which commission income you can actually bank on, and what it costs to replace the owner-producer's personal book once you own it.

A retention-driven commission engine, not a guessed revenue line. The book is built bottom-up by line — personal and commercial premium times each carrier commission rate — then rolled forward the way an agency really compounds: next-year commission = retention × book + new business. Retention is the single number that turns a book of business into an annuity, so it drives everything: the renewal-earnings coverage, the down-case, and the value.

Honesty part one — the contingency exclusion. Contingent and profit-sharing commissions are real money, but they are volatile (driven by carrier loss ratios and volume), not contractually guaranteed, and lenders do not underwrite them as a repayment source. The model breaks them out on a separate line, normalizes them to a 3-year average, and excludes them from the cash flow the DSCR is built on — because pricing or borrowing against a bonus that a single bad-loss year can wipe out is the fastest way to overpay for an agency.

Honesty part two — the owner-producer replacement. In most small agencies the owner personally produces and services a chunk of the book. If you (or your buyer) aren't going to sit in that seat, you must re-hire it — a producer at a commission split. The model deducts that to reach Adjusted EBITDA and shows the TRUE DSCR (1.44x on the base case) right next to the NAIVE broker-style DSCR (2.52x). The gap is the seller's own production — exactly what separates a financeable agency deal from one that looks great on the CIM and gets declined.

What you get:

• Commission & Retention Engine — book by line (premium × commission rate), the retention roll-forward (renewal + new business), and the contingency-exclusion panel that keeps volatile bonus income out of your underwriting.
• SDE & Valuation — SDE from commissions less compensation and operating expense, the owner-producer replacement, Adjusted EBITDA, and the price at your SDE multiple (with a memo showing how much you'd overpay if you capitalized the contingency).
• SBA 7(a) capital stack — buyer equity + seller note + loan (80/10/10), with a full-standby vs amortizing seller-note toggle that moves DSCR from declined to bankable.
• DSCR & Debt gate — the true DSCR, the naive DSCR, debt yield, the renewal-earnings coverage (2.35x of debt service), and a down-case DSCR of 0.87x when a producer leaves and retention drops — the sector's #1 risk, priced honestly.
• 5-year P&L, Returns & Exit, Dashboard — cash-on-cash, equity multiple, and a DSCR bankability grid across price and rate.
• 3-way profile toggle — Balanced / Personal-Lines-Heavy / Commercial-Lines-Heavy reloads retention, contingency, multiple, working capital and capex.
• In-depth PDF user guide + a Benchmarks & Sources tab with every assumption's range and source.

Honest by design. SDE margin held at a realistic ~31% and Adjusted EBITDA ~18% (below the 26% Best-Practices top-tier — a normalized micro-agency runs lower); a searcher prices at ~2.0-3.0x SDE, and the aggregator's 8-11x EBITDA is NOT sold as your return; contingency income is excluded from the DSCR, not smuggled into it; and no IRR is headlined, because on one small deal it is hostage to the exit multiple. Machine-verified: 62 automated checks across three engines, zero errors. Works in Excel and Google Sheets — no macros.

Educational planning tool, not financial, legal, tax or investment advice. Verify the seller's carrier statements, the 3-year contingency history, producer non-competes and your SBA term sheet before relying on any number.