Auto repair shop and car dealer loans

Which loans work best for auto repair shops and dealers?

For a repair shop, equipment financing works best for lifts, alignment racks, tire machines and scan tools, because the lender holds equipment it can resell. SBA 7(a) works best for buying an existing shop, and SBA 504 for buying the building. Working capital loans and advances cover a parts bill or a slow month.

• Equipment: 2 to 7 years, 0% to 15% down, 7% to 20% APR.
• SBA 7(a): $150,000 to $5 million for shop acquisitions and expansions.
• Working capital: $10,000 to $150,000, repaid over 6 to 24 months.

For a dealer, a floor plan line pays for each vehicle when you buy it and is repaid when the car sells, with curtailments if it sits.

What do lenders like and dislike about auto businesses?

Lenders like repair shops because demand is steady, repeat customers are common, and the equipment holds value. They like card heavy sales they can verify, a lease or owned building with several years of runway, and an owner who is a licensed technician.

They dislike environmental exposure, especially waste oil, underground tanks and paint booths, which matters most on real estate loans. For dealers they dislike thin margins, aged inventory, and the history of losses in the trade, so most banks avoid independent lots and leave them to specialist floor plan lenders.

How much can an auto repair shop or dealer borrow?

Equipment lenders fund the invoice, typically $10,000 for a lift to $200,000 for a full bay refit. Working capital lenders advance 50% to 100% of one month of deposits, so a shop doing $60,000 a month usually sees $30,000 to $60,000. SBA 7(a) is sized by the shop's cash flow and can reach $5 million for an acquisition with real estate. Floor plan lines are sized to how many vehicles you turn in a month and your net worth, with $50,000 to $250,000 common for a new lot. The how much can I borrow tool gives a range.

What documents will you be asked for?

Shops are asked for the usual working capital package plus a few trade specifics:

• 3 to 6 months of bank statements and card processing statements
• Equipment quotes with make and model
• Two years of tax returns and financial statements for SBA
• Your lease, or for a building purchase an appraisal and an environmental report
• Technician certifications and any state repair license

Dealers add their dealer license and bond, an inventory list with cost and days on lot, a current floor plan statement and sales by month. The document checklist covers the rest.

What are the common uses of funds?

Auto loans typically pay for one of these.

• Lifts and equipment: $45,000 for two lifts and an alignment rack financed over five years.
• Buying a shop: an SBA 7(a) loan for a $600,000 purchase of a shop with its customer base and equipment, 10% down.
• Buying the building: an SBA 504 loan so the rent becomes a mortgage payment on your own property.
• Parts and payroll in a slow month: a $25,000 short term loan. See cash flow gaps.
• Dealer inventory: a $150,000 floor plan line to keep 15 to 20 cars on the lot.

What usually gets an auto application declined?

For shops, the most common reasons are declining card sales over three months, NSF days, existing advances, and a credit score under about 600. Real estate loans get declined on environmental findings and on buildings with old tanks that were never closed properly. For dealers, the most common declines are being under a year old, no dealer license or bond, inventory that has sat more than 90 days, and losses on the tax return. Being out of trust on a prior floor plan, meaning cars were sold and the lender not paid, is a hard stop. Why loans get denied explains the fixes.

How to apply

Apply once here with your statements, equipment quotes or inventory list, and your application reaches equipment, SBA, working capital and dealer lenders together. Or connect your AI assistant to our MCP server through the agents hub and let it read your statements, fill the application and submit it for you. It is free to the business, and offers come back to the same place so you can compare the rate, term and payment for each.