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

Colorado garages borrow twice the usual amount

Automotive mechanical repair is the fifth-ranked class in Colorado, and 7(a) has produced 307 approvals there across FY2017 to FY2026, totalling $180.8 million, which ranks the state 9 among states. The feature that sets this cell apart is the ticket. A median loan of $360,000 is 2.00x the nationwide 7(a) figure for repair shops, so a Colorado garage typically borrows about double what its peers do elsewhere. Mid-range loans come in at $150,000 through $791,600.

Lenders and the Front Range

Wells Fargo Bank National Association leads with 27 loans and $12.2 million, followed by U.S. Bank, National Association at 24 and $5.7 million, SouthState Bank, National Association at 22 and $18.4 million, BMO Bank National Association at 18 and $13.5 million, and Newtek Bank, National Association at 16 and $7.9 million. SouthState's dollars per loan stand out. The names reflect where SBA records the paper today, and they tell a borrower nothing about any institution's terms. El Paso County has 46 loans, Arapahoe 45, Adams 41, Jefferson 34, Douglas 23, Weld 20, Denver 19, Larimer 15, Boulder 13 and Broomfield 7. Franchised shops hold 11.1% of loans.

Cancellation and charge-off floors

A floor of 10.5% of approvals through FY2024 were cancelled, which rises to 11.3% if undisbursed loans are added. For charge-offs the cohort holds 139 loans, and at least 2.9% have been written off to date, while 2.2% went inside five years. These are minimums, because many loans are still open.

Testing a Colorado repair shop

A study should count the vehicles registered nearby and the bays that compete for them, then test the technician labor the shop can hire and keep. With loans this large, it should say whether the money buys a building, adds bays or acquires a going shop, and compare the plan with a ticket near $360,000. Equipment lists, lift capacity and diagnostic tools deserve line-item pricing. Coverage should be shown at lower bay utilisation than plan. Appraisal will distinguish real estate from business value when the shop is owner-occupied.

The class folds truck service in with car repair and leaves out collision, glass and lube work, so a bodywork or quick-lube concept belongs on other pages.