Auto Repair Shop Feasibility Study in the Providence-Warwick, RI-MA Metro Area

A small-ticket class with a steady local presence

In the Providence-Warwick area, mechanical auto repair shows a long run of modest loans with few big ones. From FY2017 to FY2026 SBA approved 73 loans for $12.4 million, and a midpoint of $100,000 comes to just 0.43x what shops elsewhere borrow at the midpoint. Typical loans land between $50,000 and $205,000. Nationally the area is 34 of 660 for this work, and locally mechanical repair is 5 of 39 by asset class, and a location quotient of 1.01x leaves the class nearly level with the national mix.

A cross-state metro

The area straddles Rhode Island and Massachusetts. Providence County has 31 loans, Bristol County in Massachusetts 18, Washington County 11 and Kent County 8. A shop on the Massachusetts side is therefore part of this record just as much as one in Rhode Island, because membership in the metro comes from the project county's place in the 2023 statistical areas. Car and truck mechanical work are filed together under one industry code; a collision, windshield or lube-bay business falls outside it and belongs on another page.

Program mix, franchising and holders

The 7(a) program accounts for 61 loans and 504 for 12. Franchise share is 6.8%, so independents dominate. Eastern Bank holds 9 loans worth $558,000, Citizens Bank, National Association 8 for $798,400, Santander Bank, National Association 7 for $1.6 million and Bristol County Savings Bank 5 for $350,000, all as SBA reports each current holder.

Trend and loss figures

The years SBA can publish show 13 loans and $1.8 million in FY2017, 9 and $974,000 in FY2018, 8 and $719,000 in FY2019, 8 and $1.9 million in FY2021, 7 and $1.8 million in FY2023, and 6 and $510,000 in FY2024. Loan Analytics withholds the remaining years under its small-count rule, and withheld is not zero. Cancellations ran at 10.3% or more across FY2017 through FY2024 approvals, and the ceiling variant, which also treats still-undisbursed loans as cancelled, matches it. The charge-off rate is withheld.

What a study has to test here

Planning a Providence-area shop starts with bays and lifts measured against the vehicle population the trade area supports, technician supply and wage pressure, and parts and diagnostic-equipment cost. With loans centred near $100,000, the study should separate owner earnings from the real estate. The appraisal will look at the going concern and at the building if it is included, and loan payments must survive a quarter of low throughput.