SBA 504 Auto Repair Shop Feasibility Study in Virginia

Two corporations carry most of the book

Virginia's SBA 504 auto repair loans are concentrated in a few development corporations. Business Finance Group, Inc. holds 32 of the 56 loans approved from FY2017 to FY2026, with $22.2 million, while 504 Capital Corporation holds 18 with $5.5 million and Rappahannock Economic Development Corporation has 5 with $1.2 million. The total is $29.6 million. Virginia ranks 8 among states by loan count for this program and class, and repair shops stand 2 of 39 among Virginia asset types, which makes them the second most common Virginia 504 borrower by this ranking.

Loan size and geography

The median loan of $363,000 is 0.89x of the national 504 median for repair shops, and the Virginia shops in the central half of the ranking borrowed $237,000 to $654,250. Franchising is 7.1%. Counties show a suburban pattern: Fairfax, Henrico, Loudoun and Virginia Beach City each hold 5 loans in the table, then Chesapeake City and Prince William each hold 3. Approvals reached 10 in FY2020 and 6 in FY2026 with $5.3 million, the largest year in dollars.

Scope of the code

The class means mechanical repair of cars, and truck service cannot be separated from it, because truck repair shops are indexed with car repair. Shops that specialize in collision work, windshields or quick lube bays are filed elsewhere and do not appear in Virginia's count.

Floors

Cancellation reached 19.1% of FY2017 to FY2024 approvals and 21.3% when undisbursed loans count. No charge-off rate is printed since fewer than 30 funded loans form the early cohort; that is a gap, and the figure is neither low nor zero.

What a 504 repair-shop study tests

A repair shop on a 504 loan is usually a real estate purchase or build, so the study should open with the site: bay count, lot size for vehicles waiting, zoning for repair use, and the cost of any environmental cleanup. Demand comes from the vehicle population and the drive time to competing shops, so the study should show a trade area and the work mix between routine service and heavy repair. Technician availability limits revenue more than space does. Coverage of the debt must hold if the owner's technician leaves, and the appraisal of a special-use shop building may be narrower than the loan request implies.