SBA 7(a) Auto Repair Shop Feasibility Study in North Carolina

North Carolina garages: a premium ticket and a lender that stands out

Automotive mechanical repair ranks fifth among North Carolina's 39 classes, and under 7(a) the state places 17 among states, with 228 approvals from FY2017 to FY2026 worth $132.2 million. The median loan of $343,250 is 1.91x the nationwide 7(a) benchmark, so shops here borrow nearly twice the usual amount, and loans cluster between $125,000 and $776,000. Franchised shops hold 21.1% of loans, a notable share for a trade of mostly independents. Nothing here stands out against both parent records, so the page profiles an ordinary cell.

Banks and places

Live Oak Banking Company stands well ahead with 32 loans worth $27.7 million. Wells Fargo Bank National Association holds 17 worth only $1.9 million, Northeast Bank 14 worth $1.8 million, The Fidelity Bank 13 at $15.1 million, and First National Bank of Pennsylvania with 11 loans and $9.3 million. Dollars per loan vary greatly across these, which suggests distinct niches. SBA lists the present or former holder only. Wake County leads with 29 loans, Mecklenburg 20, Forsyth, Iredell and Union 13 each, Cabarrus 12, Guilford 10, New Hanover 8, Lee 7 and Catawba 6.

Floors, including a zero

Cancellation reaches at least 9.6% of approvals through FY2024, or 10.8% when undisbursed loans count. The 99 loans funded in the earliest cohort have a charge-off floor of 4.0% so far, while the five-year figure prints at 0.00%. The gap shows that every loss so far came after the fifth year, and that the first floor may rise as the cohort ages.

Testing a North Carolina repair shop

Demand rests on the cars in the area, how old they are and who else repairs them. A study should test technician hiring and pay, bay utilisation, parts and labor margin, and whether the shop sits in a franchise system or independently. Compare the plan with a ticket near $343,250, and itemise equipment against any building or land purchase. Run coverage at lower utilisation than planned. Where the borrower owns the property, the appraisal separates real estate from business value, whatever share of the loan SBA guarantees.

Heavy and light vehicles are repaired under one code here, and collision, glass and lube businesses are classed elsewhere.