Auto Repair Shop Feasibility Study in Montana

Montana repair shops: small tickets in a big state

Auto repair lending in Montana is modest. SBA approved 50 loans from FY2017 to FY2026 worth $16.5 million, and the median of $172,500 equals 0.73x the nationwide figure. Half the loans fall between $50,000 and $495,000. Montana ranks 40 of 51 among states, while repair ranks 4 of 39 among Montana industries, and a location quotient of 1.17x shows a slightly above-average weight. No metric clears the distinctness margin.

Under 7(a) fall 43 loans and under 504 fall 7, with franchising at 0.00%. Glacier Bank has 10 loans and $2.5 million, The Yellowstone Bank has 8 loans and $2.3 million, and U.S. Bank, National Association has 6 loans worth $3.5 million, a larger ticket per loan than either local bank. Local institutions are well placed to know shop owners and fund small purchases.

Billings and Missoula

Yellowstone County has 14 loans, Missoula 12, Lewis and Clark 6, Flathead 5 and Gallatin 4. FY2025 produced 10 loans worth $2.9 million, FY2021 produced 8, and FY2020 only 2. Montana approvals through FY2024 show cancellations of at least 8.3%, equal to the ceiling. Montana's loss rate is held back, since the disbursed cohort is too small to publish, which is not the same as no losses.

Diligence for a Montana shop

A study should test a thin and spread-out customer base: population within a drive, seasonal swings with winter and tourism, and the competing dealer service departments. Technician supply is hard in smaller towns. Cost covers lifts, diagnostic tools and a building. Coverage should be based on labor hours sold. The class leaves out collision, glass and quick-lube businesses, while heavy truck service is lumped in with passenger car repair, so loan sizes mix light and heavy duty shops. Lenders in a state with long distances between towns should also ask how far a customer will drive, because a single shop often serves a whole county and its fortunes track that county's vehicle count. The study should end by testing what happens to coverage if the owner-operator is out for a season, and a lender should want that stress case written down before closing.