In 2017, auto repair industry generated an estimated $67 billion in revenue across the United States, employing nearly 560,000 workers. From 2013-2018, the industry grew approximately 2.7% per year, which means that it could be a great time for current auto shop owners to expand their business or even open a new location. So, if you’re looking for the financing you need to grow, start, or refinance debt on your auto repair company, you might want to look into an SBA Express Loan.
How SBA Loans Can Help Auto Repair Shops Grow
SBA Express loans can offer auto repair businesses up to $350,000 in less time, and with less paperwork than the SBA’s flagship 7(a) loan. However, just like SBA 7(a) loans, the SBA Express loan can be used for multiple business purposes, such as working capital, equipment financing, and commercial real estate.
Auto repair shop owners can use SBA Express loans to:
Build a new auto repair business: If you want to build a new auto repair shop from the ground up, the Express loan can help by financing general construction, security system installation, furniture, and even landscaping costs.
Provide working capital: Whether it’s tools, supplies, or simply paying your employee’s salaries, SBA Express loans can help provide you the capital you need to keep your business running.
Buy a partner’s share in the business: If you want to buy out your partner, an Express loan is a great way to do it.
Refinance eligible business debt: If you have debt that’s currently being offered to you at a very high interest rate, or has other terms that are considered unreasonable, you might be able to use an SBA Express loan to refinance it.
Acquire an auto repair shop: Buying an existing auto repair shop can be a great way to avoid the hassles of starting a brand new business, and an SBA Express loan can provide you the funds you need to do it.
SBA 7(a) Loans, SBA Microloans, and SBA 504 Loans May Also Be Able to Help Auto Repair Shops Thrive
While SBA Express loans are a great choice for many auto repair shops, some auto businesses may find that another type of SBA loan better suits their needs. The smallest auto repair shops (or those who only need a little bit of cash) may find that an SBA microloan is best. Microloans are provided in amounts up to $50,000, and can be funded even faster than Express loans. In comparison, auto shops that need more than $350,000 in financing might prefer the SBA’s popular 7(a) program, which can provide up to $5 million in funds to eligible businesses. Or, if your business is only looking to fund commercial real estate and heavy equipment (and doesn’t need working capital financing), the SBA 504 loan could be best.