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SBA Express Loans for Car Dealerships

According to a 2016 report, there were more than 16,000 franchised car dealerships and more than 20,000 independent dealerships across the U.S., employing approximately 2 million people and generating nearly $1 trillion in annual revenue. All this makes the car dealership industry an essential part of the American economy. So, if you’re interested in purchasing, expanding, or refinancing business debt on a car dealership, an SBA Express loan may be able to help.

Using SBA Express Loans for Auto Dealerships

SBA Express financing can be issued in amounts up to $350,000 and can be used for a wide variety of business purposes, including working capital, commercial real estate, and equipment, making it a fantastic option for auto dealers in need of quick funds.

  • Working capital financing: Whether it’s paying your staff or simply paying your light bills, keeping an auto dealership running is no easy feat. Fortunately, the SBA Express loan can help dealerships get the working capital they need to stay on track.

  • Purchasing inventory: Inventory is one of the largest expenses for car dealerships, and while $350,000 may not be able to get you many vehicles, it can provide a much needed financing boost, especially for smaller dealerships.

  • Business debt refinancing: If your car dealership currently has one or more business loans that are being offered to you on unreasonable terms, an SBA Express loan could be a smart way to refinance them.

SBA 7(a) and SBA 504 Loans Can Also Be Great Options for Dealerships

SBA Express loans may be a great choice for some car dealerships, but, since they only offer up to $350,000 in financing, larger dealerships often need significantly larger loans. But don’t worry— the SBA has other options, like its flagship SBA 7(a) loan program, which offers loans of up to $5 million. Like SBA Express loans, 7(a) loans can be used for working capital, equipment, and commercial real estate.

Or, if you’re looking to purchase commercial real estate or finance the construction of a new dealership, you may want to go with an SBA 504 loan. These loans are offered in amounts up to $5.5 million, and have incredibly low interest rates (currently sitting at around 5-6%). However, this form of financing is limited to funding commercial real estate and heavy equipment, and cannot be used for working capital.