Auto Repair Shop Feasibility Study in Missouri

A Missouri book that tracks the class nationally

Missouri repair shops borrow almost exactly what the class borrows elsewhere. The median of 212 SBA approvals from FY2017 to FY2026 was $228,350, which is 0.97x the national median for mechanical repair, and none of the three headline gauges (median, cancellation, charge-off) clears our test of differing from the Missouri all-asset book and, at once, from repair shops nationwide. What does stand out is weight and structure. The location quotient of 1.16x says repair shops take a larger slice of Missouri's SBA lending than they do of the country's, Missouri ranks 21 of 51 nationally for repair lending, and inside Missouri the class holds the 5 of 39 spot. Gross approvals total $83.5 million.

The program mix leans hard toward 7(a), with 188 loans against 24 under SBA 504; Missouri's middle half of loans falls between $103,750 and $502,125. That is the profile of business acquisitions, equipment and modest building work more than large ground-up projects. OakStar Bank leads the holder list with 21 loans worth $9.9 million, then U.S. Bank, National Association with 15, Legacy Bank & Trust Company and Hawthorn Bank 9 each, and The Bank of Missouri 7 worth $3.1 million. On the 504 side, Rural Missouri, Inc. holds 12 loans worth $5.1 million, which tells an owner buying a shop building that a Missouri development company already knows this class. Franchise concepts are rare, at 5.2% of loans.

Where Missouri deals have stumbled

The cancellation floor is the figure a borrower should notice. Of Missouri shop approvals in the FY2017 to FY2024 window, 12.9% or more were later cancelled, and 14.1% if loans not yet disbursed are counted. A cancelled approval usually means a purchase price, an appraisal or a down payment that did not survive due diligence. Losses after funding have been modest: 2.3% of the 86 Missouri loans disbursed in FY2017 through FY2021 have ended in charge-off, a figure matched by the 2.3% five-year rate, so the recorded Missouri losses arrived early rather than late. Both rates are floors.

Testing a Missouri shop project

A feasibility study here has to earn its numbers at the trade-area level. Jackson County holds 35 approvals, Saint Louis County 30 and Greene County 23, with Christian, Clay and Jasper at 11 each, so a lender can compare a site against a real local history. The study should count competing bays and vehicles in reach, price equipment and any building work at today's cost, and prove that Missouri labor and parts margins cover debt service. Because the median sits close to the national class, the appraisal should be able to rest on ordinary repair comparables. The class code joins truck service to car repair; collision and refinishing shops, windshield work, quick lube and the catch-all automotive repair code sit outside it, which a study should keep in mind when it reads these outcomes.