Auto Repair Shop Feasibility Study in the San Francisco-Oakland-Fremont, CA Metro Area

The largest repair loans of this group, and no charge-offs

Auto repair loans in San Francisco-Oakland-Fremont are large and have not, so far, been charged off. With a median of $525,500, loan size is 2.24x what the class shows nationally, and the middle of the 142 loans stretches from $252,250 to $933,750. For 62 loans in the disbursed cohort, FY2017 to FY2021, the charge-off rate to date reads 0.00%, and so does the rate inside five years. Both are floors drawn from a small cohort, so they do not prove that losses cannot occur.

The area stands 19th of 660 for car and truck mechanical repair, while the class is eighth among the 39 classes in the area. SBA approved 142 loans worth $101.3 million between FY2017 and FY2026. The location quotient of 0.96x is just under the national share. By program, 107 loans are SBA 7(a) and 35 are SBA 504, a large 504 share that points to shop owners buying property. Franchise flags are on 7.0% of loans. Alameda County has 56 loans, Contra Costa County 36, San Mateo County 24, Marin County 15 and San Francisco County 11.

The 504 and 7(a) holders

Under 504, SBA lists Bay Area Employment Development Company with 11 loans worth $6.5 million, The Mortgage Capital Development Corporation with 10 worth $10.3 million and Capital Access Group, Inc. with 8 worth $5.9 million. On the 7(a) side the roster reads U.S. Bank, National Association, 16 loans and $7.6 million; Live Oak Banking Company, 10 and $10.2 million; Wells Fargo Bank National Association, 7 and $4.0 million; Harvest Small Business Finance, LLC, 6 and $8.7 million; and BMO Bank National Association, 5 and $4.7 million. Holder lists describe portfolios, not underwriting.

Cancellation took 9.9% or more of approvals in FY2017 to FY2024; the ceiling for this cell stays unprinted because Loan Analytics holds it back, a blank, not a zero. Yearly approvals peaked at 25 loans in FY2021, worth $26.2 million, and fell to 8 in FY2024, worth $1.9 million, before recovering to 21 in FY2025 and 20 in FY2026, the latter worth $15.6 million.

What a Bay Area repair-shop study has to test

At loan sizes like these the project is often a purchase of a building and a going business, so the study must value both. The rent or ownership cost per bay is the first thing to test against revenue. The study should size demand from vehicles registered nearby, from commuters and from fleets, against dealerships and independents. Technicians' wages must be competitive, and environmental rules on waste oil and fluids add cost. Debt service coverage should hold if bay utilization falls. In the data, trucks and cars share one repair classification, with collision, glass and lube work excluded. Bay Area counts are minimums, because the July 2023 list has to contain a loan's project county before the loan joins the area.