Scrap Metal Recycling Yard
The business where people bring you product, you weigh it, and you profit
Scrap metal yards buy ferrous (steel, iron) and non-ferrous (copper, aluminum, brass, stainless) metals from contractors, homeowners, demolition crews, and industrial clients — then sell to mills and processors at a spread. Non-ferrous margins run 25–50%; ferrous margins are thinner at 5–15%. The model is uniquely cash-generative because customers come to you with inventory. A well-located mid-size yard processes $1M–$5M in material annually at net margins of 8–15%. Large yards scale to $10M–$50M. Private equity (e.g., Sims Metal) has been consolidating the industry, making independent yards attractive acquisition targets.
Avg Revenue
$2.0M
Profit Margin
10%
Acquisition Multiple
1.5x - 4x
Startup Cost
$150K - $800K
Difficulty
4/5
How It Works
Customers drive onto your lot, you weigh their material, identify and separate metals, and pay them spot-price minus your spread. You accumulate inventory until you have enough tonnage to sell to a mill or broker. Price risk is the key variable — you buy at today's spot and hope prices don't fall before you sell. Active yards separate, bale, and shred material to increase value before selling upstream. Non-ferrous metals (copper at $4+/lb, brass, aluminum) are the profit engine; ferrous volume creates cash flow.
Revenue Range
Real Acquisitions in This Category
SBA 7(a) change-of-ownership loans · NAICS 423930 · Recyclable Material Merchant Wholesalers
Deal Size Distribution
Deal Flow Over Time
Financing Profile
Recent Comparable Deals
| Closed | State | Loan | Implied deal | Jobs | Franchise |
|---|---|---|---|---|---|
| Sep 2025 | SC | $1.3M | $1.5M | 6 | — |
| May 2025 | NY | $1.6M | $1.9M | 12 | — |
| Dec 2024 | MO | $500K | $588K | 25 | — |
| Dec 2024 | CA | $2.5M | $2.9M | 6 | — |
| Jul 2024 | WI | $283K | $333K | 5 | — |
| Dec 2023 | AL | $2.7M | $3.2M | 50 | — |
| Dec 2022 | NJ | $500K | $588K | 18 | — |
| Dec 2022 | NJ | $2.5M | $2.9M | 18 | — |
| Jul 2022 | FL | $1.5M | $1.8M | 8 | — |
| Mar 2022 | OH | $2.4M | $2.8M | 19 | — |
Source: SBA 7(a) FOIA dataset, filtered to acquisitions (loans where business age is "Change of Ownership"). Implied deal size assumes an 85% loan-to-purchase ratio, a common SBA change-of-ownership structure. Charge-off rate shown only when 10+ loans have resolved (paid in full or charged off). Interest rates reflect last 24 months only. Actual deal values vary with equity injections, seller financing, and working capital terms.
Pros
- +Customers bring product to you — reverse of most businesses
- +Commodity pricing means you're never negotiating at the sell side individually
- +Strong community of repeat suppliers (plumbers, electricians, demo crews)
- +Consolidation by PE creates exit opportunities at attractive multiples
Cons
- -Commodity price exposure — margins compress when metals prices fall
- -EPA environmental compliance and site remediation are real liabilities
- -Working capital intensive — you're always holding inventory at risk
- -Theft and weight fraud are ongoing management challenges
Best For
Operators with industrial or logistics backgrounds comfortable with commodity risk and EPA compliance
Operating Costs
Key costs: yard rent or purchase (large footprint required — 1–5 acres), forklifts and processing equipment ($50K–$300K), scale calibration and certification, 2–6 employees, EPA permitting, and insurance. Cash working capital for inventory is the biggest variable.
SBA Financing Estimator
Adjust the deal — see if it cash flows after debt service
Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.
Where to Buy
Search scrap metal and recycling businesses for sale
Find industrial yard properties used for scrap operations
Acquisition Score
Scores margin (30), entry multiple (25), SBA market depth (20), category risk (15), and deal momentum (10). Higher = better acquisition candidate.
Quick Facts
- Category
- physical
- Difficulty
- 4/5
- Buy price
- $3.0M–$8.0M
Buyer's Toolkit
Essential tools to get started
Some links may be affiliate links. We only recommend tools we'd use ourselves.
Ready to Buy? Start Here →
Largest business-for-sale marketplace in the US
SBA loans and business acquisition financing — get funded fast
ROBS financing — use retirement funds to buy a business tax-free
Bookkeeping for small business owners — hands-off financials
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