Auto Repair Shop Feasibility Study in Indiana

Indiana's SBA record for mechanical repair shops, car and truck together, is close to the national pattern in share and smaller in ticket. The state approved 223 such loans worth $88.9 million from FY2017 to FY2026, ranking 20 of 51 among states, and the location quotient of 0.98x puts the class almost exactly at its national weight in Indiana's SBA book. Inside the state, though, repair shops are a leading borrower group, 6 of 39 among classes. The median loan is $180,000, or 0.77x the national median for the class. No metric clears our distinctness screen, which asks for a gap of a fixed margin against both the Indiana all-class record and the national repair figures, so the story here is the shape of the loans and their losses rather than an outlier.

Small tickets, mostly 7(a), held by regional banks

The central half of Indiana repair loans lies between $64,700 and $470,900. SBA 7(a) carries 199 of the loans against 24 under SBA 504. That mix describes equipment purchases, shop acquisitions and working capital far more often than ground-up buildings. Franchised shops are 9.4% of loans. The Huntington National Bank holds 28 of the 7(a) loans for $5.0 million, First Merchants Bank 12 for $1.6 million and KeyBank National Association 10 for $5.3 million, while Live Oak Banking Company's 12 loans total $11.2 million, a sign that its deals more often include the real estate. Indiana Statewide Certified Development Corporation and Regional Development Company hold 6 apiece of the 504 loans. Marion County accounts for 40 approvals and Hamilton for 22, with St Joseph, Lake and Allen counties behind them.

Losses that arrive late

Indiana's FY2017 to FY2021 disbursement cohort holds 110 repair loans; at least 6.4% of them are charged off so far, and 3.6% were charged off within five years of approval. The gap between those floors means part of the loss in this cohort came after the fifth year, when a shop's equipment has aged and a key technician may have left. Cancellation after approval is at least 10.5% for FY2017 to FY2024 approvals, and 12.8% if every loan not yet disbursed is counted as cancelled. Both rates are floors, because loans still open can yet be cancelled or fail.

What an Indiana repair-shop study has to prove

Demand for a repair bay is local and loyal, so the study should map vehicle traffic and the competing shops, dealers and fleet services within the shop's real service radius, and test whether the bay count fits that demand. Cost means equipment quotes, lifts and diagnostics, plus any environmental work on an older site. Debt service coverage should be stressed for the years after five, when the record shows losses still accrue, with a capital reserve for equipment replacement. If an Indiana deal buys the shop building too, its appraisal must stand on a special-purpose property's value to another operator, not only to this borrower.

This class mixes truck service with car repair, since the two share a code. Body and paint shops, glass shops, quick oil change and other automotive repair sit in other classes, so their outcomes are not part of these Indiana figures.