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

Twice the national median

Louisiana's mechanical repair shops borrow at twice the rate nationally: the median loan, $360,500, is 2.00x the national 7(a) median for the class. That is the finding that distinguishes this page. The middle half runs from $125,875 to $859,725, and SBA approved 42 loans between FY2017 and FY2026 worth $22.1 million. The class ranks 12 of 39 among Louisiana's asset classes, while by loan count Louisiana is 41 among states. Franchises make up 7.1% of loans, and cancellations of FY2024-and-earlier approvals are at least 5.9%, a ceiling that is also 5.9%.

One bank named, many parishes

Northeast Bank holds 5 loans with $670,400, the only lender listed; SBA reports each loan's present holder, so this is a statement of holdings. East Baton Rouge Parish is the leader with 7 loans, Jefferson has 5, Orleans and Saint Tammany 4 each, and Caddo and St John the Baptist 3 each. Ascension, Calcasieu, Ouachita and Saint Bernard have 2 each. The list shows a state-wide spread with the Baton Rouge and New Orleans areas at the top.

Where the volume rose

The early record is thin: FY2017 and FY2019 have 1 loan each, at $350,000 and $36,900, and FY2020 has 2 loans and $550,400. FY2021 jumps to 7 loans and $7.8 million, FY2023 reaches 8 loans and $4.5 million, and FY2024 repeats 8 loans with $2.2 million. FY2025 and FY2026 each show 4 loans. The early Louisiana loans that funded are too few to give a loss rate, so none is shown and none is zero. The code lumps truck work with car repair, and collision, glass, lube and remaining repair trades sit outside the class.

What the study must settle for a Louisiana shop

Because loans run larger than the national pattern, the study must justify the scale of the project. That means showing why the shop needs the bays, equipment and building it proposes, and what billable hours would fund them. The vehicle population, the age of cars and trucks in the parishes served, and the number of competing shops and dealers determine the volume. Flood exposure and insurance costs are real issues in Louisiana and belong in the operating plan and the property review. Technician hiring and wages should be priced. Debt service has to be covered in a slow first year, and the appraiser should be asked what the property would sell for if the shop were to close.