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

Larger repair-shop loans, and heavier losses

South Carolina garages that repair cars and trucks drew 119 SBA 7(a) loans and $61.3 million in gross dollars between FY2017 and FY2026. The state is 25th for the pairing and automotive repair is the 5 of 39 class in South Carolina. At $350,000 the median loan is 1.94x the national median, and the loans around the center range from $58,000 to $748,000. Franchising accounts for 11.8% of loans. In short, the typical Carolina shop financed this way borrows far more than shops elsewhere, which often means a real estate purchase folded into the loan.

Of 43 loans funded from FY2017 through FY2021, at least 9.3% have been written off so far, 4.7% of them within five years; open loans can raise these floors. Cancellations reached at least 11.2% of FY2017 to FY2024 approvals, or 12.4% if undisbursed loans are counted. None of these cleared the distinctness margin against both South Carolina overall and the class nationally, so they are best read as the ordinary price of this lending: a shop loan can fail on a few bad years of labor or a lost key technician.

Who lends and where

The leader is TD Bank, National Association, with 23 loans, far ahead of Pinnacle Bank at 13. Countybank has 7. Wells Fargo Bank National Association also has 7, and Newtek Bank, National Association trails at 6. SBA reports the current holder, so these counts describe a book on a date and not a bank's underwriting. Charleston County leads with 22 loans, then Spartanburg with 17, Greenville 13 and Anderson 10, with Horry and Richland at 9 each. Volume reached 20 loans and $10.4 million in FY2025 after a low of 9 loans and $1.2 million in FY2018.

Defining the shop before testing it

The class cannot separate truck service from car repair, because truck shops carry the car-repair code itself. Collision and paint work, glass, quick oil changes and the catch-all repair code are left out of it. A shop study should therefore name its service mix and bays, test the draw of the trade area and competing dealers and chains, and model technician wages and retention, parts margin and warranty work. Because the median is so high, the study should state exactly what the proceeds buy, whether land and building or only equipment and working capital. For debt service, build a ramp plus a weak-year case, and expect the appraiser to ask that owner compensation be shown on its own line.