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

A repair class defined by its code

Michigan's automotive mechanical repair loans under SBA 7(a) cover car and truck service together, a pairing the data cannot split, since one industry code holds both. Excluded neighbors are body shops, glass, oil change and all other automotive repair. The FY2017 to FY2026 files record 353 loans, $111.7 million gross. Nothing in the Michigan cell is flagged as distinctive, so the page offers context. Michigan is 7 for the program and class, and the class sits 4 of 39 in the state, a strong place for a trade tied to the vehicle industry. The median of $132,000 is 0.73x the national figure, and half of loans sit between $50,000 and $365,000.

A bank that holds most of the book

The Huntington National Bank is the clear leader, with 177 loans and $32.8 million, roughly half of the loans in the cell. Newtek Bank, National Association has 16 and $8.8 million, ChoiceOne Bank 15 and $3.5 million, Fifth Third Bank 11 and $3.4 million, and Live Oak Banking Company 8 and $8.0 million. These are SBA's holder records and carry no view of how any bank treats a repair shop. Oakland County has 53 loans and Wayne 50, then Macomb with 34 and Kent with 28, Muskegon and Ottawa with 16 each, and Allegan, Grand Traverse and Kalamazoo with 9 each, and Bay with 7. Franchise brands account for 5.9%. Yearly volume has been steady, from 25 in FY2017 to 45 in FY2023, with 34 recorded in FY2026.

Outcomes so far

Cancellations come to at least 11.6%, or 13.7% if loans not yet disbursed are counted. Among 139 funded loans from FY2017 to FY2021, 4.3% are charged off so far and 3.6% by year five, a small gap that suggests problems arrive early. All are minimums, as open loans can still fail.

What a Michigan repair shop study has to test

Repair demand follows the vehicles in the trade area: registrations, the age of the fleet and traffic count on the road in front of the shop. The study should count competing independents, dealerships and chain service centers, and judge whether a niche such as hybrids, diesels or fleet accounts gives the shop an edge. Skilled technicians are the binding constraint in this trade, so the plan has to show how mechanics will be hired and kept, and what bays and lifts the staff can actually keep busy. Cost lines against a median of $132,000 include equipment, diagnostic tools, lease improvements and any environmental compliance for fluids and waste. Debt service should be proven through a slow ramp and a winter dip. A purchase of an existing shop should be tested on its tax returns, and an appraiser will value the business and real estate separately.