SBA 504 Auto Repair Shop Feasibility Study in Massachusetts

The second-ranked class in Massachusetts

Mechanical auto repair is second of 39 classes in Massachusetts under SBA 504, and the state is 4th among states by count, with 89 loans from FY2017 to FY2026 totaling $45.7 million. Borrowers here take a $378,000 median, 0.93x what the class takes nationally, and the inner half of the range reaches from $227,000 up to $565,000. Franchising barely registers, at 2.2% of loans, so the borrowers are overwhelmingly independent garages that are buying or building their real estate.

Two development companies carry the file

Granite State Economic Development Corporation has 38 loans worth $20.8 million, and Bay Colony Development Corporation 31 worth $13.3 million. New England Certified Development Corporation has 8 loans and $4.2 million, and Worcester Business Development Corporation has 6 for $4.9 million, a higher average than the others. The first name suggests a development company that also works across the New Hampshire border, which shows how Massachusetts borrowers draw on regional channels. Worcester County has 20 loans, Essex 18, Middlesex 16, Plymouth 11, Norfolk 8, Hampden 6, and Barnstable, Bristol and Suffolk 3 each. The file is located outside Boston far more than in it.

Cancellation and a clean cohort

Cancellation is the weak spot: 15.3% is the floor for approvals that fell through before funding, with the all-in ceiling landing on 15.3% too. Massachusetts garages that borrowed on 504 and funded early, 39 in all, have posted no charge-offs (0.00% either way), though loans still open leave that only a floor. Volume ran at 12 loans and $3.7 million in FY2017, 12 and $5.3 million in FY2021, and 8 and $3.3 million in FY2026.

What a study for a 504 garage tests

A 504 repair shop is a property decision first. The study should compare buying a building with leasing, test the lot's suitability for service bays, vehicle storage and parking, and show whether the neighborhood's vehicle population and competing shops support the revenue the loan needs. Environmental condition matters for any site where fluids have been handled, and the study should flag it for the lender's own review. Technician labor is a binding constraint in this trade, so wages and staffing need to be in the model. Build cost has to be squared with a loan in the neighborhood of $378,000. Coding limit: trucks are bundled with cars in the class, while collision, glass and quick-lube work are filed in separate classes and read from their own pages.