Auto Repair Shop Feasibility Study in Tennessee

Smaller loans, a 7(a) market

Tennessee's mechanical repair record is built almost entirely on SBA 7(a). Of 119 approvals from FY2017 to FY2026, 116 used 7(a) and just 3 used SBA 504, which means the real estate financing structure that development companies offer has barely reached these shops. The median Tennessee loan was $200,000, or 0.85x the class median nationwide, with a middle half spanning $99,000 to $646,850. None of the three headline gauges moves far enough away from the Tennessee all-asset book, and also from shops in other states, to pass our margin, so we read this Tennessee cell through program mix, holders and floors instead. Gross approvals total $53.6 million, Tennessee ranks 29 of 51 for these loans, the class sits 6 of 39 in Tennessee, and a location quotient of 1.04x puts it close to its national weight.

Volume has risen late in the period. Approvals fell to 3 in FY2020, then reached 25 in FY2025 and 20 in FY2026, so much of this record is recent and still young. Franchise shops account for 16.0% of loans. U.S. Bank, National Association is the largest holder with 24 loans worth $8.1 million; Pinnacle Bank and Newtek Bank, National Association hold 11 each, and Live Oak Banking Company and Old National Bank 6 each, the Live Oak loans worth $4.6 million.

What the Tennessee floors mean

A floor of 13.5% of the Tennessee shop approvals dated FY2017 to FY2024 fell through, with a 14.9% ceiling once undisbursed loans count. For a borrower that is a real cost of time: commitments here have often failed to fund, and a study that stress-tests price and equity before closing reduces that risk. The charge-off record rests on a small cohort of 33 loans disbursed in FY2017 through FY2021. Of those, 3.0% have been charged off to date, while Tennessee's five-year figure is 0.00%, so the losses recorded so far came later in loan life. Both are floors, and a cohort this small moves sharply with a single default.

What a Tennessee repair study must cover

Demand should be tested county by county. Knox County holds 17 approvals, Shelby 13, Rutherford 10 and Hamilton 9, with Sumner and Williamson at 7 each and Davidson at 6, so the lending history is spread across several markets rather than one. The study should count bays, vehicles and competing shops, price lifts and diagnostic tools at today's quotes, and demonstrate coverage of debt service at the loan actually requested, since the upper quartile of $646,850 is several times the lower one. If the shop includes its building, the appraisal must support the property on its own. Readers should also know that truck repair is filed under the car repair code, while body shops, windshield replacement, lube centers and the residual automotive repair code belong to separate codes outside this class.