Auto Repair Shop Feasibility Study in the St. Louis, MO-IL Metro Area

Automotive mechanical repair, cars and trucks together, ranks 5 of 39 among the classes in the St. Louis area and 36 of 660 among metro and micro areas for it. The FY2017 to FY2026 file lists 69 approvals totaling $29.8 million. The location quotient of 0.89x sits a little under parity, but the median loan of $265,500 is 1.13x the national median, so the typical St. Louis shop borrows slightly more than its national peer. The central half of loans begins at $150,000 and ends at $500,000, a tighter band than most classes show.

Missouri-heavy, with Illinois on the east bank

St. Louis County, MO holds 30 loans, St. Charles County, MO 10, St. Clair County, IL 7, Madison County, IL 5 and Franklin County, MO 5. A study should keep the Missouri and Illinois sides apart, since licensing, tax and permitting differ across the river. Under 7(a) there are 61 loans and under 504 there are 8, and the franchise share of loans is 7.2%, so independent shops dominate. U.S. Bank, National Association is listed with 9 loans for $2.8 million, and Midwest Regional Bank with 5 for $2.7 million, the higher average of the two.

Years, floors and withheld cells

The busiest years were FY2019 with 11 loans for $3.7 million, FY2023 with 10 loans for $3.9 million and FY2024 with 10 loans for $6.4 million, the top dollar year. FY2017 shows 5 loans and $1.5 million, FY2020 6 loans and $1.5 million, FY2021 7 loans and $3.1 million, FY2025 7 loans and $5.3 million and FY2026 7 loans and $3.0 million. Absent from the file are FY2018 and FY2022, a stricter cancellation variant and a loss rate, each too thinly supported to print, and none of them is zero. Cancellation after approval touched at least 10.9% of FY2017 to FY2024 approvals.

Testing a St. Louis shop

Because the code lumps truck bays with car bays, the study must say which vehicles the bays are built for: heavy-truck work needs taller doors, lifts and a different customer. Body, paint, glass and oil-change businesses lie outside the class and make poor comparables. Demand work should count vehicles in the trade area, their age, and the shops and dealerships near the site. Technician supply is often the binding constraint, so payroll should be tested before revenue. Equipment and build-out cost belong against the $265,500 median, and the debt service test needs a stressed ramp. The appraisal will separate the real property from the going concern.