Auto Repair Shop Feasibility Study in Maryland

Maryland repair lending runs through one bank

Mechanical repair is one of the busiest SBA classes in Maryland, ranked 6 of 39 inside the state, even though Maryland sits only 22 of 51 among states for the class. Over the FY2017 to FY2026 decade, lenders approved 203 loans for $62.7 million, and a location quotient of 1.16x places repair shops slightly above where the class sits in SBA lending nationwide. The median loan of $125,000 is just 0.53x what repair shops borrow at the national median. The median is low against the national figure, but no metric of this cell is marked as differing from both Maryland lending across every class and repair shops nationwide. The cell is best described by its weight in the state book and by one dominant lender.

The lender table explains the size. Manufacturers and Traders Trust Company holds 97 of the 7(a) loans, yet those carry only $10.9 million, a small sum for that many loans. Live Oak Banking Company, with 8 loans and $6.3 million, and Harvest Small Business Finance, LLC, with 6 loans and $4.7 million, hold far larger sums per loan. United Midwest Savings Bank National Association and Truist Bank each hold 5. On the 504 side, Business Finance Group, Inc. holds 13 of the 16 loans, for $8.6 million. SBA 7(a) carries 187 loans in all. Franchised shops are 8.4% of the count. The middle half of loans runs from $41,700 to $454,000, and Baltimore County with 28 loans, Prince Georges with 27, Anne Arundel with 24 and Montgomery with 21 lead the map.

Floors on cancellation and loss

Of approvals from FY2017 through FY2024, 12.8% or more were cancelled after approval, and 14.9% if every still-undisbursed loan is added. On the disbursed side, the 73 Maryland repair loans funded over FY2017 to FY2021 show charge-offs of 8.2% so far, 4.1% inside five years. Those are minimums, and the loans are still seasoning. Approvals went from 12 in FY2017 to 30 in FY2025 and 32 in FY2026, though FY2026 carried only $5.6 million.

The questions a Maryland shop study answers

Any Maryland repair shop study has to weigh bay count and technician capacity against the dealer service lanes and independent shops already working the trade area, which in Frederick or Howard County looks very different from Prince Georges. Cost testing means equipment quotes, any build-out, and the lease, since most of these small loans will not buy real estate. Coverage should be run on billed hours and parts margin after the owner's draw, and where a loan does buy the building, the appraisal must rest on sales of comparable service properties. A data note for Maryland readers: Maryland truck shops share the car repair code and cannot be told apart from it, and collision and paint shops, glass, quick lube and the remaining automotive services are tracked as classes of their own.