Auto Repair Shop Feasibility Study in Louisiana

Louisiana mechanical repair: under-represented but large when financed

Louisiana has 42 automotive mechanical repair loans from FY2017 to FY2026, with $22.1 million approved. The state ranks 42 of 51 for the class, and automotive repair places 12 of 39 inside Louisiana. The location quotient of 0.54x says the share is a little over half the national share. Yet when a shop does borrow, it borrows large: the median loan of $360,500 is 1.53x the median for this class nationally, with half of the loans between $125,875 and $859,725. Louisiana shops use SBA credit less often than elsewhere but for bigger projects.

What the class includes and leaves out

Truck service is inseparable from car repair here, because truck shops are indexed together with car repair. The class excludes body and paint work, glass, oil change shops and all other automotive repair, so it is mechanical repair only. A borrower planning a tire and oil operation or a collision center should not use this page as a benchmark.

All 42 loans are SBA 7(a), and no SBA 504 loan appears, so no shop in this class shows a 504 property loan. The franchise share is 7.1%. Northeast Bank holds the most loans of any lender here, 5 worth $670,400, so no lender holds a large share. East Baton Rouge shows 7 loans, Jefferson 5, and Orleans and Saint Tammany 4 each.

Outcomes and the feasibility questions

Cancellation is a floor of 5.9% among FY2017 to FY2024 approvals, and the ceiling matches at 5.9%. Fewer than 30 Louisiana shop loans are seasoned enough to measure, so Loan Analytics shows no charge-off rate under its own rule for cohorts below 30, and no zero is implied. A Louisiana study should test demand through vehicle counts, fleet customers and competing shops, then the labor market for certified technicians, since staffing is a cost the plan must carry. Cost must cover lifts, diagnostic tools and the bay layout. Coverage should be run with a slow first year. Real estate should be valued apart from the business. Volume moved from 1 loan in FY2017 and FY2019 to 8 loans in FY2023 and FY2024, then 4 each in FY2025 and FY2026.