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

Arizona repair shops borrow at twice the national median

The standout number in this cell is the ratio: a median loan of $375,000 is 2.08x the nationwide 7(a) median for automotive mechanical repair. SBA has approved 231 such loans in Arizona since FY2017, worth $143.9 million. The state ranks 16 for the class by loan count, and repair holds fifth place among 39 classes in Arizona. Half of the loans lie between $61,500 and $835,000, a very wide band, from a small garage buying a lift to an owner buying a shop with its building.

Independent, with some franchising

Franchised operations account for 13.4% of loans, a modest but real branded presence. Maricopa County holds 154 loans, far ahead of Pima with 21, Yavapai with 14, Mohave with 11, Yuma with 9 and Pinal with 8. Volume has risen since FY2018 and peaked at 35 loans in FY2025, with $19.9 million, and the largest dollar year was FY2024 at $21.8 million from 27 loans.

Lenders

U.S. Bank, National Association has 25 loans, Wells Fargo Bank National Association 17, with Zions Bancorporation, National Association at 16 and Live Oak Banking Company at 14. The names are SBA's present holders and carry no statement on any lender's rules.

Floors

Between FY2017 and FY2024, 12.2% or more of Arizona repair approvals were cancelled, and 12.8% once loans never disbursed are counted. For the 88 loans that funded from FY2017 to FY2021, 4.5% have been written off, 3.4% of them within the first five years. Remaining open loans keep these numbers provisional.

The boundaries of the class

Car and truck mechanical service are filed together. Collision work, glass, oil changes and the rest of general automotive repair fall in different classes, so a body shop or an express lube would need other pages. The wide loan band probably reflects this mixture of formats.

What an Arizona repair shop study has to test

Demand starts with the vehicle fleet around the site: its age, its mix and the competing shops. The study should test technician supply and pay, bays and billable hours, and the parts margin. It should reconcile a loan near $375,000 with the real estate: whether the shop owns its building, what comparable properties sell for, and what the lease would cost otherwise. Heat is hard on vehicles and may lift repair demand, but the study should avoid assuming it. The repayment test should survive a slow quarter and the cost of a new lift or scanner, and the appraisal should rest on documented earnings.