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

Almost no charge-offs, ordinary size

Minnesota's car and truck repair shops financed through SBA 7(a) leave a clean outcome record, and our test flagged nothing in the cell as distinctive. Look at the funded loans. Among 126 made in FY2017 to FY2021, 0.79% are charged off to date, and five years out the share is again 0.79%, a level that is low beside most cells on this site, though a floor that open loans may still raise. The wider record covers 265 loans and $95.9 million gross. The $168,000 median is 0.93x the nationwide repair-shop benchmark, with the typical range running from $50,000 to $442,000. Minnesota is 13 among states, the class ranks 4 of 39 across Minnesota, and only 6.4% of loans carry a franchise brand. One industry code covers truck and car repair, and body work, glass, oil change and other repair fall outside it.

Banks and the Twin Cities

U.S. Bank, National Association carries the largest share, 43 loans and $13.2 million, with Old National Bank at 12 loans and $12.7 million, Frandsen Bank and Trust at 10 and $3.1 million, and Wells Fargo Bank National Association at 9 and $3.2 million. The data come from SBA's holder field and say nothing of a bank's own rules. Hennepin County has 49 loans, Ramsey 29, Anoka 22, Dakota 15, Washington 14, Beltrami and Scott 10, Stearns and Wright 9, and Mille Lacs 7. Beltrami, around Bemidji, is the one northern county with real volume. Approvals dipped to 14 in FY2018 and 17 in FY2023.

Cancellation

The cancellation floor for FY2017 to FY2024 is 8.6%, rising to 9.5% if undisbursed loans are treated as cancelled. That is modest, and it suggests Minnesota repair shop deals usually close once approved.

What a Minnesota repair shop study has to test

Winter shapes this trade. Cold weather brings battery, tire, brake and heating-related work, and salt corrodes vehicles, so a Minnesota shop can see strong demand in the cold months but slow weeks in mild ones, and the monthly forecast should show it. Beyond the calendar, demand depends on the number and age of vehicles nearby, traffic on the frontage road, and the competitors, from independents to dealership service departments. Skilled technicians and their wages are the main limit on capacity, so a study should show hiring and retention. Equipment, lifts and diagnostic tools should be itemised against a median of $168,000, along with any environmental costs for used oil and fluids. Show coverage with a slow ramp. If buying an existing shop, test the books, and expect an appraiser to separate business from real estate.