SBA 504 Loans for Auto Repair Shops
As the number of vehicles on the road rises, so too does the demand for qualified professionals to service and repair those vehicles. The auto repair industry is expected to see almost 3% growth between 2013 and 2018, with a forecasted $67 billion in revenue for 2018 alone. Employment is also expect
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank at 6.1%$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1.4M offered by an SBA Lender at 9%Click Here to Get Quotes!How SBA 504 Loans Work with Auto Repair Shops
As the number of vehicles on the road rises, so too does the demand for qualified professionals to service and repair those vehicles. The auto repair industry is expected to see almost 3% growth between 2013 and 2018, with a forecasted $67 billion in revenue for 2018 alone. Employment is also expected to continue rising.
Looking to get into the industry with your own shop? An SBA 504 loan can help you do just that. With this type of loan, you can purchase and improve the real estate on which your shop will be located. You can buy an existing shop, or you can construct a brand new one. You’ll also be able to use it for equipment you’ll need, such as an air compressor, vehicle lifts, scan tools, tire mount machines, wheel balancers and the like.
If you’re looking to expand your existing shop, an SBA 504 loan can also be a great tool, and also to reduce your impact on the environment. However, they cannot be used for working capital. In that case, you’ll need to explore a conventional business loan or an SBA 7(a) loan.
We’re here to help you get the commercial financing you need. Simply fill out the form below for a risk-free consultation and a free SBA loan quote!
Related Questions
What are the eligibility requirements for an SBA 504 loan for an auto repair shop?
The eligibility requirements for an SBA 504 loan for an auto repair shop are as follows:
- The business must be a for-profit, small business as defined by the SBA.
- The business must occupy at least 51% of the project property.
- The business must create or retain at least one job for every $65,000 of SBA 504 loan funds.
- The business must have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the two full fiscal years prior to the loan application.
- The business must be able to demonstrate the ability to repay the loan.
For more information, please visit https://sba504.loans/eligibility/.
What are the benefits of an SBA 504 loan for an auto repair shop?
An SBA 504 loan can be a great tool for auto repair shops looking to purchase and improve the real estate on which their shop will be located, buy an existing shop, or construct a brand new one. It can also be used to purchase equipment such as an air compressor, vehicle lifts, scan tools, tire mount machines, wheel balancers and the like.
The SBA 504 loan typically requires lower down payments and has lower interest rates. However, it cannot be used to fund working capital. In that case, you’ll need to explore a conventional business loan or an SBA 7(a) loan.
What are the steps to apply for an SBA 504 loan for an auto repair shop?
The first step to applying for an SBA 504 loan for an auto repair shop is to fill out the form on sba504.loans for a risk-free consultation and a free SBA loan quote. After that, you will need to provide the following documents:
- Business plan
- Business and personal financial statements
- Personal tax returns
- Business tax returns
- Business debt schedule
- Business license
- Lease or purchase agreement
- Appraisal
- Environmental assessment
- Survey
- Title insurance
Once you have all of the necessary documents, you can submit your application to an SBA-approved lender. The lender will review your application and determine if you are eligible for an SBA 504 loan. If you are approved, the lender will provide you with the loan terms and conditions. You will then need to sign the loan documents and make the down payment. Once the loan is approved, the funds will be disbursed and you can begin using the loan for your auto repair shop.
What are the repayment terms for an SBA 504 loan for an auto repair shop?
The repayment terms for an SBA 504 loan for an auto repair shop depend on the loan amount and the type of loan. Generally, the loan term is 10 or 20 years for real estate and 10 years for equipment. The interest rate is fixed for the life of the loan and is based on the current market rate. The down payment is typically 10% of the total loan amount, but can be as low as 5% for certain types of loans. For more information, please visit https://sba504.loans/sba-504-blog/sba-504-loans-for-auto-repair-shops and https://sba7a.loans/sba-7a-loans-small-business-blog/sba-7a-loans-for-auto-repair-shops.
What are the maximum loan amounts for an SBA 504 loan for an auto repair shop?
The SBA 504 maximum loan amount is currently set at $5 million in lifetime dollars for auto repair shops. However, if your business is a small manufacturer, you can borrow up to $5.5 million in lifetime dollars. If you decide to embark on energy-related projects that fall under the “go green” heading, you can borrow up to $16.5 million in lifetime dollars. Note that the SBA does not limit the amount you can borrow from a conventional lender. Banks and other lenders are free to contribute as much as you qualify to borrow. However, the SBA/CDC’s contribution is limited to the aforementioned amounts. In most situations, this comes to 40% of the loan’s value (up to the contribution cap that applies to your situation).