Auto Repair Shop Feasibility Study in Arkansas

A typical repair shop, with smaller loans

Arkansas auto repair looks like the national class in frequency and runs smaller in size. The 0.97x location quotient puts these shops almost exactly at their national weighting, and the class ranks 5 of 39 among Arkansas asset types, but the state sits 38 of 51 on volume. The file shows 57 approvals totaling $17.6 million, with a median loan of $150,000 at 0.64x the national median. Half of the loans run from $41,000 to $450,000, so the program often funds a one-bay shop or an equipment purchase rather than a large multi-service facility. Nothing about cancellation or loss sets Arkansas apart from its own state record or the class.

Lenders and where they sit

The 7(a) program supplied 52 loans and 504 supplied 5, with franchises at 8.8% of loans. Arvest Bank leads with 8 loans totaling $1.9 million. U.S. Bank, National Association has 6 loans for $204,200, a very small average, Southern Bancorp Bank has 5 for $1.3 million and FNBC Bank has 5 for $1.1 million. Benton County leads geographically with 13 loans, while Pulaski and Washington counties each show 8, Izard and Saline counties 4. Volume is uneven: a single loan in FY2017, 8 in FY2020 and FY2024, and a peak of $4.6 million in FY2021 from 7 loans.

The class is mechanical repair for cars and trucks together, so a heavy truck shop is indistinguishable from a passenger car garage in these figures. Collision and paint shops, glass specialists and lube outlets belong to other lines and fall outside it. A project in those lines will not be visible here.

Arkansas cancellations amount to 7.0% at minimum, and the ceiling matches it at 7.0%, which is low. No Arkansas charge-off rate is printed because the early cohort that funded is under 30 loans, which means the rate cannot be read as zero. A lender should look at national class results for loss expectations.

Questions for an Arkansas shop study

A repair shop study should measure the car count the site can attract and keep: traffic past the door, the age of vehicles in the trade area, the number of competing independents and dealers, and what a technician actually bills. Staffing is the central constraint, so the plan should show technician wages, hiring and bay capacity. On cost, the $150,000 median is a useful guide for equipment, lifts and diagnostic tools. A project that owns the building should add real estate, and the study should keep that separate. Debt service coverage ought to survive a quiet first season, and the appraisal will rely on shop revenue, so the study should show labor and parts margins.