SBA 7(a) Auto Repair Shop Feasibility Study in New Mexico

A small-ticket class in a small market

Repair work in New Mexico is a thrifty, low-dollar part of the 7(a) program. The file counts 54 loans from FY2017 to FY2026 totaling $14.1 million. The median is $160,950, only 0.89x of the 7(a) figure for repair shops across the country, and loans in the central half of the ranking sit between $100,000 and $376,250. New Mexico ranks only 35 among states by count, but the class stands 4 of 39 among its asset types, so repair is a regular New Mexico borrower even where the state is a modest source nationally. Franchises make up 9.3%.

Albuquerque dominates

Bernalillo County holds 25 loans, a very large share, with Sandoval at 5, Lea and Santa Fe at 4 each, and Curry and San Juan at 3. The lenders listed are BMO Bank National Association with 6 loans worth $2.8 million, U.S. Bank, National Association with 6 worth $1.4 million, and Western Commerce Bank with 5 worth $671,500. Annual approvals ranged from 1 in FY2023 to 9 in FY2017.

What the code does and does not hold

Heavy-vehicle garages cannot be told apart from car repair shops here, so both are counted together. Collision, glass and quick-lube businesses are outside the cell.

Outcomes

At 7.5% of FY2017 to FY2024 approvals, cancellation is lower than for most classes in this set, and the ceiling is 10.0%. The cohort of funded loans is under 30, so the charge-off rate is withheld and is not zero. For lenders, that means this cell offers volume evidence only.

Questions for a New Mexico repair study

The study has to define the shop: general repair, specialist, or a franchise unit, since the 9.3% franchise share suggests most borrowers are independent. It should count competing shops and the vehicle registrations they serve, then estimate billed hours per technician and the labor rate customers accept. The loan may buy equipment, finance a location, or fund a purchase of an existing shop. With the median near $160,950, an acquisition priced far above it needs evidence of earnings, and the study should reconcile asking price with tax-return profit, not only with listed sales. Debt service has to hold through the loss of a key technician.