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

Oklahoma garages: bigger loans than the country, heavier losses

Mechanical repair shops fill the fourth slot among Oklahoma's 39 financed classes, even though the state's rank among states is only 29 by loan count. SBA approved 97 loans for them under 7(a) from FY2017 to FY2026, adding up to $41.7 million. Franchise brands account for 13.4% of the book. Against the nationwide benchmark the $280,000 median reads 1.56x, so an Oklahoma shop borrows noticeably more than the typical shop elsewhere, while the middle half of loans stretches from $105,100 to $560,000. By our margin test nothing here sets the cell clearly apart from its two parents, so the details below carry the weight.

BancFirst and the Tulsa and Oklahoma City counties

BancFirst holds 17 of the loans, worth $5.0 million. First Oklahoma Bank holds 10 worth $7.3 million, a much larger average, Arvest Bank holds 10 worth $3.8 million, Legacy Bank 6 worth $473,300 and Armstrong Bank 5 worth $2.4 million. Tulsa County accounts for 20 loans and Oklahoma County for 16, then Canadian with 9, and Comanche and Stephens with 5 each. The yearly series is choppy: 15 loans and $6.7 million in FY2020, 16 loans and $7.9 million in FY2022, and just 6 loans in each of FY2023 and FY2026.

This cell has the weakest loss floors in the set so far. Of Oklahoma shop loans approved between FY2017 and FY2024, a floor of 16.3% were cancelled and never funded, with the same figure at the ceiling. In the funded group of 37 loans, the charge-off floor is 8.1% to date, and the same 8.1% fell within five years, so these losses came early rather than late. Both numbers are minimums, since loans still open can deteriorate.

Testing an Oklahoma repair-shop request

The class is built on the owner's industry code, and truck repair cannot be told from car repair in it, whereas body, paint, glass and oil change shops sit outside. An Oklahoma study should make clear what kind of shop is being financed. It should test local vehicle counts and the age of the fleet, the competition, the supply of technicians, and the equipment list priced against a loan that tends to be larger than the national norm. Because early failures are visible here, the study should show a ramp period honestly and keep a reserve for slow months. Lenders considering a building purchase should review its environmental history, since fluids and tanks leave a record.