Auto Repair Shop Feasibility Study in the Grand Rapids-Wyoming-Kentwood, MI Metro Area

Grand Rapids shops borrow small

Mechanical auto repair takes fourth place in the Grand Rapids-Wyoming-Kentwood record, 4 of 39, among local classes, while the metro stands 38 of 660 nationally for repair lending. A location quotient of 0.94x lands just under parity. Over FY2017 to FY2026 there were 63 approvals worth $19.0 million. The $150,000 median is a mere 0.64x of the class median nationwide, with the middle of the book spanning $50,000 to $342,500, so tickets here are modest.

Of the 63 loans, 52 used SBA 7(a) and 11 used SBA 504, and franchise flags appear on just 7.9%, an independent-shop market. Truck service cannot be pulled apart from car repair in the class code, and body, paint, interior and glass work are filed elsewhere, which means a study has to say exactly what kind of bay it is testing.

Holders and counties

A single name stands out: 34 of the area's loans, worth $5.6 million, are listed under The Huntington National Bank on the 7(a) side, which is more than half the total. Listing reflects SBA's current-holder field and carries no judgment of the bank. Kent County, MI has 35 loans; Ottawa County, MI has 20.

For Grand Rapids repair shops SBA's file prints no loss-side rates at all, cancellation and charge-off alike, as the cohort is short of loans; absence there is not a zero. The annual record prints FY2018 with 6 loans and $1.8 million, FY2020 with 6 and $566,200, FY2021 with 7 and $3.2 million, FY2022 with 7 and $1.9 million, FY2023 with 8 and $942,000, FY2024 with 6 and $4.9 million, FY2025 with 6 and $1.3 million and FY2026 with 9 and $2.7 million. FY2017 and FY2019 are withheld. County names are lined up against the 2023 delineation to place each loan in the metro.

Grand Rapids repair bays: what to test

Vehicle counts and fleet age in the trade area come first, then the split between maintenance, tires and alignment, and the supply of technicians. Building, lifts and diagnostic gear must be costed against the $150,000 median, and bay throughput has to carry debt service. Real estate and operating business are valued apart. The study carries the name of Daniel Smith, MAI, for Loan Analytics; approval is not promised.