SBA 504 Auto Repair Shop Feasibility Study in Arizona

Arizona's 504 record for mechanical auto repair has one feature no neighbouring cell shares: not a single FY2017 to FY2024 approval was cancelled. The floor is 0.00% and so is the ceiling, which means that every loan approved in those years went on to disburse. The cell itself holds 52 loans and $34.9 million. At $488,000 the median loan is 1.20x its nationwide 504 counterpart for mechanical repair, while the central half of loans spans $292,250 to $685,000. Inside Arizona the class is fourth-placed (4 of 39), and the state itself is tenth nationally on loans counted.

A Maricopa story

Maricopa County alone accounts for 36 loans. Pima follows with 4, Coconino and Pinal with 3, Mohave and Yuma with 2, and Navajo and Yavapai with 1. That concentration is steeper than most state tables and says that a shop in the Phoenix area is the typical subject. Franchise share is just 1.9%, so these are independent shops buying or building their own premises, the very use that 504 real estate financing was shaped around.

Three companies, three book sizes

The lender table names three development companies. Arizona Capital Source shows 20 loans and $9.3 million, The Mortgage Capital Development Corporation 17 loans and $17.3 million, and CDC Small Business Finance Corp. 14 and $7.9 million. Note the second name: fewer loans than the first but nearly double the dollars, so its average project is much larger. That list tracks who carries each note and is silent on how any of them underwrites. Approvals by year moved from 2 in FY2017 up to 10 in FY2022, dropped to 3 in FY2023 and 2 in FY2024, then returned to 5 and 7.

What the missing figure means

No charged-off rate is shown for this cell, as the loans that have run long enough to be measured are too few. Do not read the blank as a clean record; it is simply not published. The perfect cancellation floor deserves similar care, since a floor is the least that happened and the study should not promise that the next project behaves the same way.

Scope of the class and the Arizona questions

Mechanical work on cars and on trucks is pooled in one class, so a diesel truck shop sits in the same totals as a passenger-car garage. Collision and paint, windshield work, quick lubes and miscellaneous repair are counted in other classes and do not appear in these figures. A study for an Arizona shop should therefore state the service mix, then test bay count against the vehicle population in reach, technician hiring and pay, parts and equipment cost, and how the building would be re-used if the operator left. Debt service coverage needs to be run on both loan pieces, with the appraisal separating the property from the business.