American deaths reached 3,072,039 in 2024 and will keep rising toward a peak around 2055. The cremation rate reached a projected 63.4% in 2025 and is heading to 82.3% by 2045. Both trends are certain, and they point in opposite directions for revenue. A funeral home can take more calls each year and earn less, which is the central analytical problem in this asset class and the one a projection built on trailing revenue per call will miss entirely.
The crossing, and what it does to the model
The cremation shift is no longer emerging. It is decisive.
NFDA's 2025 Cremation and Burial Report projects a 2025 US cremation rate of 63.4% against a 31.6% burial rate, rising to 82.3% cremation and 13.0% burial by 2045.
CANA's 2025 Annual Statistics Report notes that "the national growth rate is slowing after reaching 61.8% in 2024" and projects that "by 2029, the cremation rate in the U.S. will be 67.9%." CANA's 2026 report gives a 2025 rate of 62.8% and projects 69.1% by 2030.
The two associations report modestly different figures because they use different methodologies and base years. Both are worth citing where they diverge, and neither should be presented as the single authoritative number.
Every state plus the District of Columbia is projected to exceed 50% cremation by 2035 per NFDA — CANA puts that milestone at 2033.
State variation remains wide, and it matters more than the national figure for any specific market. Highest cremation rates: Nevada, Washington, Oregon, Hawaii, Maine and Montana. Lowest: Mississippi, Alabama, Louisiana, Kentucky and West Virginia.
Why the mix beats the volume
Deaths are rising. The CDC recorded 3,072,039 deaths in 2024 in final NCHS data published January 2026. The age-adjusted death rate actually fell 3.8% from 2023 and life expectancy rose to 79.0 years — so near-term growth is demographic rather than rate-driven. Census projections point to roughly 3.6 million deaths in 2037 and a peak around 2055, and the Congressional Budget Office now projects deaths will exceed births by 2030.
But each incremental death is increasingly a cremation.
NFDA's median cost figures, from its 2023 General Price List study: $8,300 for a funeral with viewing and burial; $6,280 for a funeral with cremation including alternative container and urn. Direct cremation with no service runs roughly $1,500 to $3,500.
Those figures are now approximately three years old and should be treated as directional rather than current.
The consolidator data is more recent and tells the same story. SCI's Q1 2025 funeral segment averaged $5,743 revenue per service across 95,624 services, with a comparable cremation rate reaching 64.4% in 2025. Carriage's 2025 average revenue per funeral contract was approximately $5,780.
So the modelling instruction is direct: project the disposition mix forward on the local trajectory, not at today's rate, and apply revenue per call by service type rather than a blended average. A target whose cremation rate has moved from 30% to 55% over five years should not have its current revenue per call capitalised.
And the distinction within cremation matters as much as the shift to it. A cremation with a full service is a different business from a direct cremation, and a model that treats them as one line has concealed the variable that determines the outcome.
Alternative dispositions
Human composting, or natural organic reduction, is legal in roughly 13 to 14 states as of 2025 — Washington was first in 2019, with New Jersey and Georgia among recent additions. Alkaline hydrolysis is legal in approximately 28 states.
Neither is yet material to most feasibility studies, though 61.4% of consumers express interest in green options per NFDA's 2025 data, and legality is changing state by state quickly enough that current status should be verified rather than assumed.
The lending picture
Funeral homes are among the best credits in SBA lending, and lenders know it.
Live Oak Bank, which runs a dedicated deathcare vertical, has stated the SBA "loves lending to deathcare organizations, which have one of the lowest default rates of all industries."
For context, the all-industry SBA 7(a) resolved-loan charge-off rate runs approximately 15.8% per PeerSense's July 2026 analysis of more than 1,283,073 resolved loans. Funeral homes sit well below that.
One measurement note that matters: that 15.8% figure is charge-offs divided by fully resolved loans, not an active-book default rate, and is not directly comparable to figures computed on other bases.
A genuine data gap worth stating plainly. Precise 7(a) and 504 loan counts, dollar volume and average loan size for NAICS 812210, funeral homes and funeral services, and 812220, cemeteries and crematories, are not published in a single authoritative SBA table. Funeral homes are a small, low-frequency lending category relative to restaurants or personal care. Anyone quoting a funeral-home-specific SBA default rate is triangulating, and the underlying data requires a direct pull from SBA disclosure records.
Active lenders. Live Oak Bank describes itself as the leading SBA originator in the space and was named the most active SBA 7(a) lender by dollar amount for FY2025, with 2,280 approvals and more than $2.8 billion deployed. Other large national business-acquisition lenders — Huntington National Bank, Byline Bank, Newtek, Readycap and Celtic Bank — also participate.
Pricing. Funeral home 7(a) acquisitions typically carry Prime plus 2.25% to 4.75% — roughly 10% to 13% with Prime at 6.75% as of March 2026 — with amortisation up to 25 years for real estate and 10 years for equipment and working capital, and a minimum debt service coverage ratio around 1.25x.
What SOP 50 10 8 changed
Effective 1 June 2025, and several changes bear directly on funeral home acquisitions:
A minimum 10% equity injection for changes of ownership, with a seller note satisfying at most 50% of that injection and only on full standby — no principal or interest — for the entire loan term.
The 7(a) Small Loan ceiling dropped from $500,000 to $350,000.
Multi-step ownership changes are disallowed. Phased buyouts are out; transfers must occur in a single closing. This is a substantial change for the gradual succession arrangements common in family funeral businesses, where a junior partner buying in over several years was standard practice.
Personal real estate pledges are required from owners holding 20% or more where a loan is under-collateralised.
The crematory decides the appraisal
This is the single most actionable point in the article and it turns on one piece of equipment.
Under the SOP, a funeral home with a crematory is a special-purpose, limited-market property. A funeral home without a crematory is treated as multipurpose.
For a special-purpose property, the lender must obtain an independent appraisal by a Certified General Real Property Appraiser who has completed at least four going-concern appraisals of equivalent special-use property within the last 36 months, allocating separate values to land, building, equipment and intangible assets.
That raises appraisal cost, extends the timeline, narrows the pool of qualified appraisers substantially, and can affect collateral coverage and therefore the equity required.
A buyer weighing whether to acquire a home that includes a retort should know this before the letter of intent, not during underwriting.
USDA
For rural funeral homes in communities of 50,000 or fewer, the Business and Industry Guaranteed Loan Program under 7 CFR Part 5001 is an alternative.
FY2025 guarantee percentages: 80% for loans up to $5 million, 70% from $5 million to $10 million, and 60% above $10 million. Loans run to $25 million, and $40 million for certain cooperatives. The FY2025 guarantee fee was 3% of the guaranteed amount. Collateral is required at 100% or more, with debt service coverage typically at a 1.25x minimum.
Applications are submitted by the lender rather than the borrower, which changes who a consultant is actually writing for.
Consolidation, and what the market pays
Service Corporation International operates 1,493 funeral service locations and 496 cemeteries across 44 states, eight Canadian provinces, the District of Columbia and Puerto Rico. FY2025 funeral revenue was $2,405.5 million, up 3.5%, with full-year adjusted earnings per share of $3.85, up 9%, and $966 million in adjusted operating cash flow. It served approximately 700,000 families in 2024 and holds roughly 16% to 18% revenue market share of a highly fragmented market.
In 2025 SCI spent $101 million acquiring 22 funeral homes and 2 cemeteries in major metropolitan markets, plus approximately $79 million on real estate and new construction.
Carriage Services guided to $440 million to $450 million of 2026 revenue, with an adjusted consolidated EBITDA margin around 30.8% in Q4 2025 and leverage reduced to approximately 4.0x.
Multiples
Independent funeral homes transact at roughly 4.0x to 8.0x EBITDA, or 2.5x to 4.5x seller's discretionary earnings for small owner-operated businesses. Revenue multiples cluster around 0.6x to 1.0x.
By size band, on M&A adviser figures referencing SCI filings and Johnson Consulting methodology:
- Single location, under 150 to 400 calls: 3.5x to 6.5x
- Multi-location, 400 to 1,200 calls: 5.5x to 8.0x
- Regional platforms: 7.0x to 9.5x
- Funeral and cemetery combinations: 6.5x to 10.0x
EBITDA rather than price per call has been the primary value driver for over twenty years, which is worth saying because price-per-call rules of thumb still circulate.
The succession wave has underdelivered
NFDA's 2025 survey found 46% of funeral directors plan to retire within the next five years, and a 2023 member survey similarly found nearly half planning to retire within five years while fewer than a quarter had a succession plan in place.
But the transaction flow has been slower and more selective than a decade of predictions implied.
Private equity was active — Access Holdings backed Foundation Partners Group, StoneMor was taken private by Axar, Park Lawn went private in 2024. Then 2025 cooled. Foundation Partners announced new ownership in August 2025 and paused acquisitions, and the pandemic pull-forward of deaths reversed.
Owners saying they intend to sell and transactions actually closing are different things, and a market analysis that treats the retirement statistic as pipeline is overstating available supply.
Preneed: asset and liability in the same line
Preneed contracts are either trust-funded — the operator deposits a state-mandated percentage with a trustee, released on performance — or insurance-funded, through a single-premium policy from a specialty preneed insurer such as Homesteaders or Forethought, assigned to the funeral home.
State trusting requirements range from approximately 70% to 100% of contract value. New York requires 100%. Washington allows the operator to retain up to 10%. Maryland cemeteries deposit 50% plus 5%. Forty-nine states regulate preneed, with Alabama historically the exception.
In a purchase the backlog transfers as both an asset and a liability. An asset in future revenue and, in some states, retained trust earnings. A liability in the obligation to perform at a price fixed years earlier.
The core risk is underfunding. If trust growth has not kept pace with the cost to deliver, the buyer inherits a loss on every maturing contract — and the loss is realised gradually, over years, as those contracts come due.
The diligence requirement is specific: obtain the trust reconciliation contract by contract, and compare trust value against today's delivery cost. A book materially underfunded on maturing contracts should change the price or the structure of the assumption of obligations.
And one accounting trap. Under ASC 606, preneed is deferred revenue — so reported earnings understate cash collected. A buyer reading the profit and loss without the preneed schedule is reading half the business.
Operating economics
The margin gap is real
Independent EBITDA margins typically run 15% to 22%. Consolidators run around 30% consolidated — SCI's Q1 2025 adjusted EBITDA margin was 30.4%, Carriage around 31% to 32% — with location-level field margins higher still.
That gap is driven by scale, overhead absorption and preneed float, and it is not an accounting artifact. A buyer assuming a well-run independent should match consolidator margins is assuming something structurally unavailable to them.
The 150-call floor
This is the most striking operating figure in the sector.
NFDA's average is approximately 113 calls per home per year.
Practical single-location breakeven clusters around 150 or more calls, and below roughly 150 a home is marginal.
Which means the average American funeral home operates below the practical viability threshold — and explains the slow secular decline in home count better than any narrative about consolidation. Fixed costs are high: facility, fleet, licensed staff, 24-hour on-call coverage. Volume drives everything.
NFDA reports 15,401 funeral homes operating in the US, roughly 75% family or privately owned, employing about 105,300 people and generating $16.3 billion. IBISWorld reports a much higher establishment count, around 29,000, using a broader NAICS 81221 definition — the two are not contradictory but measure different universes, and a market analysis should be explicit about which it uses.
Labour is the binding constraint
The mortuary science pipeline is not keeping pace with retirements, and NFDA members cite personnel availability as their top business challenge.
Licensed funeral directors average roughly $50,000 to $61,000 base, against a BLS median of $49,800 for morticians, undertakers and funeral arrangers as of May 2024, and $76,830 for managers. Metropolitan markets and on-call stipends push higher.
Payroll commonly runs 25% to 48% of revenue depending on call volume — and a low-volume home is crushed by fixed labour, which is the arithmetic behind the 150-call floor.
The crematory question, again — this time on margin
Approximately 30% of NFDA-member funeral homes operate their own retort, with another 10% planning to add one.
Owning the retort captures the cremation fee in-house rather than paying a third party, which protects margin on a growing cremation book.
A precise basis-point margin improvement is not published, so the direction is defensible and the magnitude is not. And it interacts with the SBA special-purpose classification above — the same equipment that improves margin complicates the appraisal.
What the consultant actually does
Quantifies demand from deaths, not population
Service area population multiplied by the local crude death rate per thousand, adjusted for age structure, gives expected deaths. Then the competitive census — which homes serve this area, at what call volume — gives realistic market share.
Market share is measured in call volume, not revenue. Revenue reflects both share and mix, and conflating them conceals which one is moving.
Models the mix forward
Not at today's cremation rate. At the local trajectory, with revenue per call applied separately by service type — burial, cremation with service, direct cremation.
Tests relationship transferability, which is the hardest variable
This is where funeral home feasibility differs most from other asset classes.
Community goodwill, church and hospice referral relationships, and repeat multigenerational family business attach to the departing owner and the family name — not to the corporate entity. They can attrite sharply after a sale.
A credible study models an attrition assumption explicitly — commonly 5% to 15% in year one — and stress-tests the seller's post-sale transition period.
Where the owner's family name is the brand, continued use of that name is a negotiable term with real economic value, and the study should say so.
Where a home is heavily dependent on a single named director, that dependency is the principal risk in the transaction and belongs in the summary rather than a footnote.
Distinguishes acquisition from de novo, and funeral home from cemetery
For an acquisition, lenders want trailing call volumes, verified financials, the preneed schedule and a transition plan.
For a de novo, they want a demographic demand build, competitor saturation analysis, a longer ramp and deeper equity. De novo funeral homes are genuinely hard — they must build community trust from zero against entrenched incumbents, and many never reach breakeven volume.
Cemetery feasibility is a different discipline entirely. It turns on saleable inventory of interment rights, endowment care fund adequacy and preneed property sales — not on call volume. A study that applies funeral home methodology to a cemetery has analysed the wrong business.
Regulatory
The FTC Funeral Rule at 16 CFR Part 453 remains in force unchanged.
The FTC opened an advance notice of proposed rulemaking in November 2022 and held a workshop in September 2023 exploring mandatory online price disclosure along with six other issues — third-party crematory fee disclosure, the reduced basic services fee, new dispositions, embalming disclosure and readability.
As of 2026 no amendment has been finalised. The next routine review is expected around 2030, though the ANPR process remains technically open.
One finding from that review is worth knowing for competitive analysis: fewer than 40% of funeral home websites reviewed by the FTC provided any pricing online. In a market where price transparency is arriving eventually, that is both a compliance exposure and a differentiation opportunity.
State licensing governs ownership transfer and varies widely — Minnesota is one of only four states requiring a bachelor's degree in mortuary science. Crematory operation requires separate licensing and environmental and air quality permitting. Preneed is regulated state by state as set out above.
Where transactions fail
Projecting current revenue per call forward and ignoring the cremation shift. The dominant error.
Overpaying on a revenue multiple when EBITDA and the cost of replacing owner labour tell a different story.
Underestimating call volume attrition when the owner and the family name leave.
Inheriting an underfunded preneed book.
Under-resourcing licensed labour, particularly below the 150-call threshold where fixed staffing costs dominate.
And on de novo specifically: the ramp is long, incumbents are entrenched, and community trust cannot be purchased. Many do not reach viable volume.
What a lender is reading for
- What is the call volume, and is it stable? Trailing three to five years, with any trend explained.
- What is the disposition mix, and where is it heading? Modelled forward rather than held flat.
- Does it clear the volume floor? Around 150 calls for a single location, against an NFDA average of 113.
- Will the calls transfer? With an attrition assumption stated and a transition period negotiated.
- What does the preneed book actually contain? Reconciled trust value against current delivery cost, contract by contract.
- Is there a crematory? Because that determines whether the property is special-purpose and what appraisal it requires.
- Does the equity injection work? 10% minimum, with a seller note counting only on full lifetime standby and capped at half — and no phased buyout.
- Can the licensed staff be retained?
Frequently asked questions
Do rising death rates help funeral homes? Less than expected. US deaths reached 3,072,039 in 2024 and are projected to rise toward a peak around 2055, but the cremation shift is outrunning volume growth. A home can take more calls each year and earn less, because each incremental death is increasingly a cremation at materially lower revenue per call.
What is the current US cremation rate? NFDA's 2025 report projects 63.4% for 2025, rising to 82.3% by 2045. CANA reported 61.8% for 2024 and 62.8% for 2025, projecting 67.9% by 2029 or 69.1% by 2030 depending on the report year. The two associations use different methodologies and base years, so both figures are worth citing where they diverge.
How much less is a cremation worth than a burial? NFDA's 2023 median cost figures put a funeral with viewing and burial at $8,300 against $6,280 for a funeral with cremation including alternative container and urn. Direct cremation with no service runs roughly $1,500 to $3,500. Those figures are approximately three years old and should be treated as directional.
How many calls does a funeral home need to be viable? Practical single-location breakeven clusters around 150 or more calls a year, and below that a home is marginal. NFDA's average is approximately 113 calls per home per year — meaning the average American funeral home operates below the practical viability threshold, which explains the slow decline in home count.
Does a crematory change the SBA financing? Yes, materially. Under SOP 50 10 8 a funeral home with a crematory is a special-purpose, limited-market property, while one without is multipurpose. Special-purpose requires an appraisal by a Certified General Real Property Appraiser who has completed at least four going-concern appraisals of equivalent special-use property within the last 36 months, with separate values allocated to land, building, equipment and intangibles.
Can a funeral home be bought in stages? Not with SBA financing. SOP 50 10 8, effective 1 June 2025, disallows multi-step ownership changes — transfers must occur in a single closing. That is a substantial change for the gradual succession arrangements common in family funeral businesses.
What equity does a funeral home acquisition require? A minimum 10% of total project cost under SOP 50 10 8, with a seller note satisfying at most half of that and only if on full standby for the entire loan term.
What multiple do funeral homes sell for? Roughly 4.0x to 8.0x EBITDA for independents, or 2.5x to 4.5x seller's discretionary earnings for small owner-operated businesses, with revenue multiples clustering around 0.6x to 1.0x. Single locations under 400 calls run 3.5x to 6.5x; regional platforms reach 7.0x to 9.5x. EBITDA rather than price per call has been the primary value driver for over twenty years.
Is the preneed backlog an asset or a liability? Both. It transfers as future revenue and, in some states, retained trust earnings — but also as an obligation to perform at a price fixed years earlier. If trust growth has not kept pace with delivery cost, the buyer inherits a loss on every maturing contract. Trusting requirements range from roughly 70% to 100% of contract value by state.
Do consolidators really achieve better margins than independents? Yes, and structurally. Independents typically run 15% to 22% EBITDA margins against roughly 30% consolidated for SCI and Carriage, driven by scale, overhead absorption and preneed float. A buyer assuming a well-run independent can match consolidator margins is assuming something unavailable to them.
How much call volume is lost when a funeral home changes hands? Community goodwill and referral relationships attach to the departing owner and family name rather than the entity, and a credible study models 5% to 15% attrition in year one with a negotiated transition period. Where the family name is the brand, continued use of that name carries real economic value.
Has the FTC Funeral Rule changed? No. The Rule at 16 CFR Part 453 remains in force unchanged. The FTC opened a review in November 2022 and held a workshop in September 2023 exploring mandatory online price disclosure among other issues, but no amendment has been finalised as of 2026. Notably, fewer than 40% of funeral home websites reviewed by the FTC provided any pricing online.
Sources
National Funeral Directors Association — 2025 Cremation and Burial Report; 2023 General Price List Study; 2025 and 2023 member surveys; industry statistics.
Cremation Association of North America — 2025 and 2026 Annual Statistics Reports.
US Centers for Disease Control and Prevention, National Center for Health Statistics, Data Brief 548, January 2026; US Census Bureau population projections; Congressional Budget Office projections.
SBA Standard Operating Procedure 50 10 8, effective 1 June 2025, including special-purpose property provisions.
PeerSense SBA default rate analysis, July 2026.
Live Oak Bancshares press release, 6 October 2025; Coleman Report SBA lender rankings.
Service Corporation International FY2025 and Q1 2025 results and filings.
Carriage Services FY2025 results and 2026 guidance.
Johnson Consulting valuation methodology as referenced by funeral home M&A advisers.
US Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2024.
Federal Trade Commission Funeral Rule, 16 CFR Part 453; advance notice of proposed rulemaking, November 2022; workshop record, September 2023.
7 CFR Part 5001, USDA OneRD Guarantee Loan Initiative.
State preneed trusting statutes, including New York, Washington and Maryland.
Prepared by feasibility-study-consultant.com. NFDA median cost figures derive from the 2023 General Price List Study and are approximately three years old. Funeral-home-specific SBA loan counts and default rates are not published in a single authoritative SBA table and none is asserted here; the all-industry figure cited is on a resolved-loan basis and is not comparable to rates computed on other bases. Independent EBITDA margin and payroll benchmarks derive substantially from secondary analysts and M&A advisers rather than a primary operating study. The margin effect of crematory ownership is directionally positive but not quantified in public sources. Human composting and alkaline hydrolysis legality is changing state by state and should be verified currently. Cremation rate figures from NFDA and CANA differ by methodology and base year and both are cited. Programme terms are set by SBA and USDA and are periodically revised; confirm current requirements with the participating lender. This is not legal, tax or lending advice. Last updated: August 6, 2026.