SBA 504 Auto Repair Shop Feasibility Study in Michigan

Michigan mechanical repair shops show a cancellation floor of 25.8% on approvals through FY2024, and the ceiling is identical. More than one approval in four never funded, and that fact, more than any size measure, is what this Michigan cell adds to the state record and to the national picture. The rest is ordinary: 37 loans and $19.7 million, a $370,000 median sitting at 0.91x the nationwide 504 repair-shop figure, and a middle half from $244,000 to $619,000. Franchise share is 8.1%.

Rank and lender structure

Michigan stands 12th for this use when loans are counted nationally, and repair shops are 6 of 39 among the state's 504 classes. Two development companies hold the book: Michigan Certified Development Corporation with 21 loans and $10.7 million, and Great Lakes Commercial Finance with 15 and $8.8 million. The lender list is a record of notes held, and it should not be read as a view of either organisation. Counties are led by Kent with 7 loans, then Grand Traverse and Ottawa with 4, Macomb, Oakland and Wayne with 3, and Eaton, Ingham, Livingston and Washtenaw with 2.

What the years show

Approvals went 3, 6, 2 and 4 from FY2017 to FY2020, then 2 in FY2021, a peak of 8 in FY2022, and 2 in FY2023. FY2024 had 4 loans at $5.5 million, the largest dollar year, and the last two years each had 3. An uneven pattern like this is not a trend, and when a class swings from 8 loans to 2 within a year, reading demand into it is unsafe.

Boundaries of the class and the missing loss figure

Diesel truck work cannot be teased apart from passenger-car repair here, so a heavy shop and a neighbourhood garage share one total. Collision work, windshields, lube shops and every other repair type are counted elsewhere. Michigan's charge-off rate for these shops is left out because few loans have matured enough to measure, so nobody should take silence for a clean history.

The questions a Michigan shop must answer

Given how often approvals failed to close, a study should look hard at what stalls a shop project: environmental review of an old garage site, zoning for outdoor vehicle storage, contractor pricing, and the seller's timetable on a purchase. It should then establish the vehicle count within reach, technician supply, the equipment list and its cost, and how debt service coverage holds if bays sit empty in a slow season. Ask the appraiser to price the building both as a garage and as ordinary commercial space.