SBA 7(a) Auto Repair Shop Feasibility Study in Alabama

Repair shops that run large and franchised

Alabama auto repair shops stand out for loan size and for franchising. Sixty approvals sum to $22.9 million in the ten-year file. The midpoint of $258,000 is 1.43x the nation's 7(a) repair-shop midpoint. The middle of Alabama's loans runs between $83,250 and $520,750, and 16.7% of loans are franchised, a visible slice. By count Alabama ranks 34 among states, yet repair shops are 5 of 39 in Alabama's own class mix, so the trade matters more at home than the national rank suggests.

Lenders and where the loans sit

BayFirst National Bank holds 5 loans worth $1.3 million. Wells Fargo Bank National Association also holds 5, but the dollars are just $45,000, so the two are different kinds of book. Those holder lines reflect whoever SBA names today, and say nothing about practice. Jefferson County leads with 13 loans, Montgomery has 6, and Madison and Mobile have 5 each. Annual counts: 10 in FY2017, 2 in FY2018 and 2 in FY2019, then a climb to 9 in FY2023, with 7 in FY2025 and 7 in FY2026.

Reading the class correctly

The class is defined narrowly. Here truck work and car work arrive as one: heavy-truck shops are indexed to the code that car shops use, so a truck yard and a neighborhood garage sit in a single count, while neighboring trades such as paint shops, glass and lube stops are left out. A reader comparing a specific shop should confirm which kind it is. Alabama repair approvals dated through FY2024 were cancelled before funding at a floor of 6.5%, with the same 6.5% as ceiling. The charge-off figure is held back because Alabama's funded cohort is thin; read the missing number as unknown rather than as none.

What the study needs to prove

Demand for a repair shop is measured in vehicles: cars in operation within the trade area, fleet age, and the dealers, chains and independents within a short drive. The study must price the plant, with lifts, alignment and diagnostic equipment, and establish whether technicians can be hired, because labor is the binding constraint in this trade. Build revenue from bays, hours and labor rate rather than from a loose guess. With a midpoint near $258,000, an equipment-heavy request is common, so show equipment life against the loan term. Coverage needs a case in which the lead technician leaves. Where a building is financed, the appraisal has to value it for a later owner, not just this operator.