Auto Repair Shop Feasibility Study in Georgia

Bigger repair-shop loans in a smaller share of the book

Georgia's mechanical repair borrowers take larger loans than repair shops elsewhere: Georgia's median approval of $370,000 is 1.57x the national figure. Yet repair shops are a modest part of Georgia's SBA lending, with a location quotient of 0.81x; the state ranks 16 of 51 with 263 loans and $159.4 million approved from FY2017 to FY2026, and the class places 10 of 39 within Georgia. The cell's character comes from a bigger typical ticket in a thinner market share, with the cancellation and charge-off floors set out below.

What the loan sizes and lenders say

Half of Georgia's approvals land between $153,500 and $740,000. SBA 7(a) carried 232 loans and SBA 504 just 31, and franchised shops make up 13.7%. Newtek Bank, National Association leads 7(a) lending with 18 loans for $8.6 million. Wells Fargo Bank National Association sits behind 17 loans totalling only $2.7 million, while Live Oak Banking Company's 11 loans reached $13.0 million and Renasant Bank's 11 reached $10.2 million. Capital Partners Certified Development Company and Florida Business Development Corporation each hold 9 of the 504 loans. Gwinnett County leads with 37 loans, then DeKalb with 29, Cobb with 23 and Fulton with 21.

Cancellation and loss floors in Georgia

For approvals dated FY2017 to FY2024, Georgia's cancellation floor sits at 7.8% and its ceiling is the same 7.8%, so loans still awaiting their money do not move it: a fairly firm closing record for a borrower to plan around. Losses deserve more attention. Of the 127 Georgia loans that funded between FY2017 and FY2021, 3.9% have been charged off so far, the five-year rate is the same 3.9%, and open loans can still add to that floor. The five-year rate equals the rate to date, so every charge-off so far came within five years of approval.

For a Georgia shop seeking this financing, the study has to establish demand in the trade area, meaning the vehicles that will need mechanical work there and the bays already serving them, and test whether projected car counts fill the planned bays. Cost has to be checked against the build-out or acquisition price, with equipment priced on its own. Debt service coverage must survive a realistic opening period, since the five-year charge-off rate matches the rate to date. The appraisal is the last test: a special-purpose repair building can appraise below cost, so the study should show the lender its value with and without the business in it.

On coding, the class mixes truck service with car repair because they share one code, and it excludes body and collision work, paint, auto glass, quick lubes and the catch-all of other automotive services, each indexed under a code of its own.