Auto Repair Shop Feasibility Study in Kansas

A core Kansas class, without a distinct profile

Mechanical repair is one of the classes Kansas lenders return to most: it ranks 5 of 39 among Kansas asset classes, and its location quotient of 1.14x means repair shops take a larger share of Kansas SBA approvals than they do nationally. Measured against other states the picture is modest, with 92 loans worth $41.6 million from FY2017 to FY2026 placing Kansas 31 of 51. Our screen tests whether a cell's median loan, cancellation floor or charge-off floor sits apart from both its state and its class nationally by a set margin, and Kansas repair shops do not clear it on any of the three. The median of $300,000 is 1.28x the national median for the class, a higher ticket but not one far enough out to count.

Small tickets, local banks

The middle half of loans runs from $75,000 to $542,000. At the low end a Kansas loan buys lifts, diagnostic gear or an existing shop's goodwill; at the top it starts to buy a building. SBA 7(a) carried 79 loans and SBA 504 carried 13, so a minority of Kansas borrowers financed the real estate through a certified development company. Only 3.3% of loans went to franchised shops. The lender list is short and regional: U.S. Bank, National Association with 10 loans totalling $1.9 million, Emprise Bank with 7, INTRUST Bank National Association with 6 worth $2.2 million and Dream First Bank National Association with 5. Johnson County alone accounts for 27 approvals, followed by Sedgwick with 14, Shawnee with 9 and Finney with 8. Annual volume has stayed flat, near 10 loans in most years, with FY2024 the largest by dollars at $6.8 million on 8 loans.

Outcomes for borrower and lender

Kansas repair loans approved over FY2017 to FY2024 hold a 10.8% cancellation floor, and the ceiling matches at 10.8%, because no loan in the cohort is still waiting on its money. Of the 41 loans disbursed in FY2017 to FY2021, 2.4% have been charged off, and all of it within five years of approval, at 2.4% as well. For a lender that pattern points to early-life risk: the shops that failed did so while still building their customer base. Both rates are floors.

A feasibility study for a Kansas repair shop therefore has to prove the car count and service mix that the trade area can supply, set technician wages and bay equipment costs against a loan likely in the $300,000 range, and show debt service coverage through the first years, when the recorded losses happened. Where the loan also buys the building, the Kansas appraisal has to stand on the real estate rather than on goodwill.

These figures cannot separate truck service from car repair, which share a code. Body, paint and interior work, glass, oil change shops and other automotive repair belong to different codes and are left out.