Auto Repair Shop Feasibility Study in Texas

Texas approved 838 SBA loans for automotive mechanical repair shops from FY2017 to FY2026, $531.0 million in all, and ranks 2 of 51 among states for the class. Within Texas the class places 8 of 39, and a location quotient of 1.03x means Texas gives repair shops nearly the same slice of its SBA lending as the nation does. The case for a Texas shop rests on its own numbers, and the one a lender reads first is a charge-off floor of 9.1%.

Loss and cancellation in the Texas cohort

That floor covers the 373 Texas repair loans disbursed in FY2017 to FY2021, and 6.7% of them were charged off inside five years of approval. It is a floor because many of those loans are still open and can still fail. Approved Texas repair loans that were later cancelled come to at least 11.2%, and to 12.0% once undisbursed loans are added. For a borrower, those floors are the starting point for any projection of car counts.

Loan sizes, brands and lenders

The median Texas loan is $350,000, or 1.49x the class median nationally; the loans in the middle half span $150,000 to $804,750. Franchise units account for 18.0% of loans, so brand systems are a real presence here. SBA 7(a) carries almost all of it, 782 loans against 56 under SBA 504. PNC Bank, National Association tops the 7(a) holders at 60, The Huntington National Bank holds 45 worth $42.6 million, and Live Oak Banking Company holds 38 worth $33.4 million. Capital Certified Development Corporation and Greater East Texas Certified Development Company lead a thin 504 field with 11 and 10. PNC's lead is a count of loans it holds today in SBA's files.

Testing a Texas shop before the lender does

Demand should be read county by county: Harris has 175 approvals, Dallas 105, Tarrant 76, Bexar 57 and Collin 52, and those are the counties with the most approvals. A study has to test the build or purchase cost against the median and the upper quartile, debt service coverage on a ramp that allows for slow early years, and, where property is pledged, an appraisal that separates land and building from the business. Franchise projects need the brand's unit economics checked against local car counts. Truck service sits in the same industry code as car repair, while body shops, glass, oil change and other repair are outside the class, so those formats need their own evidence. FY2025 brought 130 approvals and $92.6 million.