SBA 504 Auto Repair Shop Feasibility Study in Utah

Utah repair shops under 504

Mechanical auto repair is fourth of 39 classes in Utah for SBA 504, and the state is 7th by count, with 70 loans from FY2017 to FY2026 worth $48.6 million. The $525,000 median is 1.29x the national reading, and the middle half is a tight $341,250 to $794,500. Franchise brands account for 21.4% of loans, higher than in Massachusetts on a sibling page, so a chain affiliation is a realistic option for a Utah borrower, though most shops are independent.

Two companies, one corridor

Mountain West Small Business Finance holds 45 loans worth $30.4 million, and Intermountain Business Lending, Inc. 23 worth $16.1 million, so between them the two development companies hold nearly all of the file. Salt Lake County has 27 loans and Utah County 14. Davis has 9, Weber 6, and Cache and Washington 5 each. The Wasatch Front accounts for most of the activity. A sponsor in a rural county has little local precedent, and the study should say how the market there differs from the corridor where nearly every comparable loan sits.

Clean floors

Cancellation after approval is floored at 8.8% with an identical ceiling. The 34 early loans that funded record 0.00% charge-off to date and over five years, a floor because open loans can still fail. Annual approvals grew from 7 loans and $3.0 million in FY2017 to 9 and $5.2 million in FY2021 and 11 and $10.6 million in FY2026, and FY2026 is well above both earlier years in dollars. Newer loans have had the least time to season, which is one more reason to read a clean record as a floor.

Testing a Utah shop with real estate

A 504 repair project is tied to property, so the file puts the building first: zoning for service bays, access, parking and storage, and the buildable cost of a shop against a loan near $525,000. Demand follows the vehicles in the drive area and the competition from dealers and chains. Technician labor is scarce in many markets and should be reflected in the staffing plan and wage assumptions. A lender will ask how the shop covers the building payment in a slow season. Coding limit: this class bundles truck and car mechanical work, and collision, glass and lube shops are filed elsewhere. The appraisal values the building and the business.