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

A Utah repair shop loan that runs larger than usual

Utah's automotive mechanical repair record under SBA 7(a) is built on 156 loans approved from FY2017 to FY2026, totalling $67.3 million. By loan count Utah sits at rank 22 for this pairing, yet the class stands 6 of 39 inside the state, which says repair shops matter more to local small business lending than the national count suggests. What separates the cell from the pack is size: the median loan of $224,000 comes in at 1.24x the nationwide 7(a) benchmark. Half the loans run from $50,000 to $534,075, and franchised shops account for 11.5% of the total.

Who lends and where

Mountain America FCU holds 30 of these loans worth $7.4 million, the most of any holder SBA reports, followed by Zions Bancorporation, National Association with 22 loans and $5.2 million, with U.S. Bank, National Association a distant third at 13 loans and $3.1 million, and Central Bank with 11 loans and $2.6 million. On the map, Utah's shops cluster along the Wasatch Front, where Salt Lake County has 65 loans, Utah County 25 and Davis County 12, with Iron and Weber counties at 8 each. Volume outside those corridors is a handful of loans, which matters for a borrower proposing a shop in a small town.

For Utah repair shops approved in FY2017 through FY2024, at least 9.4% dropped out before funding, and as many as 11.0% if every undisbursed loan is read as a dropout. Of the 68 repair-shop loans that funded from FY2017 to FY2021 approvals, a floor of 5.9% has been written off so far, against only 1.5% lost in the first five years. The gap between those two charge-off figures shows that most losses here arrive after year five, so a lender reading only the early window would understate the risk. Both rates are floors. One definitional note applies: SBA's industry code gives heavy-truck garages no code of their own, so they ride along inside these counts, while body, paint, glass and oil change businesses are not.

Testing a Utah garage request

A study for a Utah mechanical repair shop should test the drive-time trade area and the count of competing bays, technician availability, which constrains revenue more often than demand does, and equipment cost against a loan that commonly sits near $224,000. Debt service coverage should be modelled on realistic bay utilisation, with a downside year. If a building comes with the request, its appraisal must value the building as a repair facility, with its environmental history reviewed, because contamination from past use can derail an otherwise sound request.