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

Mechanical repair in Tennessee

Automotive mechanical repair, cars and trucks together, is sixth of 39 classes in Tennessee for SBA 7(a), with 116 loans approved from FY2017 to FY2026 worth $52.2 million. The state is 26th by count. Against the nation, a $200,000 median reads as 1.11x, and the spread between $97,250 and $635,275 for the central half is wide for a trade that ranges from a two-bay garage to a multi-bay service center. Franchise brands account for 16.4% of loans, leaving independents as the typical borrower and chains as a visible minority.

Where loans come from

The most of any name SBA lists belongs to U.S. Bank, National Association: 24 loans and $8.1 million. Pinnacle Bank has 11 loans and $5.6 million, while Newtek Bank, National Association also has 11 but only $2.5 million. Six loans each also sit with Old National Bank ($2.4 million) and Live Oak Banking Company ($4.6 million). By county, Knox leads with 16, Shelby follows with 13, Rutherford has 10 and Hamilton 9. Sumner and Williamson each have 7, and Davidson has 6, so Nashville's own county is not the leader, a pattern that suggests suburban and mid-sized markets carry much of the activity.

Outcome floors on a smaller cohort

Only 33 loans from the early years reached disbursement, so the charge-off figures rest on a modest base. Charge-offs to date are floored at 3.0%, and the five-year measure is 0.00%. Cancellation after approval runs at least 13.5%, rising to 14.9% when loans never disbursed are counted. Open loans can still change these, and a small cohort moves with a single default. Volume moved from 7 loans and $4.9 million in FY2017 to 14 and $8.2 million in FY2021 and then 18 and $7.2 million in FY2026.

Testing a repair shop proposal

A study for a Tennessee repair shop needs to prove steady work, not just a good location. It should test the number of vehicles within the drive area, the competition from dealer service departments and national chains, the labor market for technicians, the equipment and lift costs against a ticket near $200,000, and the revenue per bay that covers payroll and debt service. The ratio to the national median shows that Tennessee borrowers lean slightly larger, which suggests that purchases of existing shops and real estate figure in the mix. Coding sets a boundary: mechanical work on trucks is bundled with cars, and shops that mainly do collision, windshield or lube work are filed elsewhere, so such a proposal belongs on a sibling page.