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

A cell of small, independent, low-loss shops

Washington's mechanical repair shops under SBA 7(a), covering car and truck service, took 291 loans between FY2017 and FY2026, worth $129.9 million in gross dollars. Franchising is almost absent at 2.7%. The median loan of $183,000 is 1.02x the median for such shops nationwide, with loans from $50,000 up to $652,300 making up the central half. Washington is tenth among states for the program and sixth of 39 in its own class list. Nothing about the loan size is unusual, and the shape of the cell is better described by its outcomes.

Cancellations and charge-offs

Cancellation hit 8.4% at the least among FY2017 to FY2024 approvals, and 9.9% if loans never disbursed are included. Of the 103 funded loans, 1.9% are charged off to date, and the early-years measure prints the same 1.9%. Both are low floors, and a bank can read them as a cell where the weak point is getting started.

Holders and places

Columbia Bank leads with 62 loans worth $15.2 million, and U.S. Bank, National Association follows with 46 worth $19.5 million. KeyBank National Association has 21 worth $6.2 million, Newtek Bank, National Association 12 worth $2.2 million, and Wells Fargo Bank National Association 17 worth $7.1 million. A holder row says who has the loan, never why it was made. King County has 79 loans, Pierce 54, Snohomish 30 and Clark 24. Annual approvals grew from 20 in FY2019 to 44 in each of FY2025 and FY2026.

What this class includes

Heavy and light vehicle service are filed together, so a truck repair loan cannot be told from a car repair loan. Body and paint shops, glass work, oil changes and the remaining repair trades sit outside the class, which covers mechanical work only.

What a Washington shop study must test

With a guarantee this flexible, the study should name the purchase: a business acquisition, a building, lifts and diagnostic tools, or working capital. It should test demand from the vehicles registered near the site, the competing shops and dealer service departments, and the supply of certified technicians, which often limits capacity more than demand does. Bay count and billed hours per technician determine revenue, so the study should build the forecast from them. Test the lease or property cost against a median near $183,000. Show payment coverage with the first year's ramp, and expect the appraiser to value the shop on its earnings.