Top SBA Lenders for Auto Repair
Owning an auto body shop has proven to be a smart financial move for many, especially in a climate where the cost of replacing vehicles keeps climbing. If you’re considering expanding your current shop or acquiring a new one, SBA loans could be the ideal route. We’ve put together this guide on the top lenders that offer SBA loans for auto body shops, giving you everything you need to make an informed decision.
Top Auto Body Shop SBA Lenders
| Rank | SBA Lender | Location | # of Loans | Average Loan Amount | Average Rate |
|---|---|---|---|---|---|
| 1 | U.S. Bank | Cincinnati, OH | 42 | $145,500 | 9.7% |
| 2 | Live Oak Bank | Wilmington, NC | 18 | $1,650,000 | 9.5% |
| 3 | Huntington Bank | Columbus, OH | 15 | $570,000 | 10.0% |
| 4 | Readycap Lending, LLC | Berkeley Heights, NJ | 13 | $485,000 | 12.0% |
| 5 | TD Bank | Wilmington, DE | 11 | $88,000 | 11.8% |
| 6 | Newtek Bank | Miami, FL | 10 | $820,000 | 11.5% |
| 7 | BayFirst National Bank | Saint Petersburg, FL | 9 | $140,000 | 12.5% |
| 8 | JPMorgan Chase Bank | Columbus, OH | 5 | $135,000 | 13.5% |
| 9 | M&T Bank | Buffalo, NY | 4 | $37,500 | 12.4% |
| 10 | Noah Bank | Miami, FL | 4 | $800,000 | 12.0% |
Why SBA Loans Are Perfect for Auto Body Shops
The automotive repair industry is thriving. As car prices have surged by over 40% since January 2021, many consumers are opting to repair rather than replace their vehicles. Auto body shops have seen significant growth, with many reporting several months of work lined up due to demand and ongoing supply chain issues.
SBA loans can be an attractive financing option for auto body shop owners. These loans, backed by the Small Business Administration, offer favorable terms such as lower down payments, longer repayment periods, and competitive interest rates. Additionally, they allow you to use the loan for various purposes, such as purchasing equipment, refinancing debt, or expanding your business.
Types of SBA Loans for Auto Body Shops
1. SBA 7(a) Loans
The SBA 7(a) loan is the most popular choice for auto body shops. It provides flexibility in how you can use the funds: buying equipment, acquiring inventory, refinancing existing loans, or even buying out a partner. The maximum amount available through the SBA 7(a) loan program is $5 million, with terms of up to 10 years. Many lenders prefer offering SBA 7(a) loans for their longer repayment terms and the guarantee provided by the SBA.
Benefits of the SBA 7(a) Loan for Auto Body Shops
- Flexible Funding: Can be used for inventory, equipment, expansion, or partner buyouts.
- High Maximum Amount: Loans up to $5 million allow for large-scale investments.
- Low Equity Requirements: SBA guarantees lower the risk for lenders, making it easier for you to qualify.
2. SBA Express Loans
SBA Express Loans are part of the broader 7(a) program but offer a quicker approval process. These loans can provide up to $500,000, and approvals typically take only a few weeks, rather than months. This makes Express Loans ideal for smaller or time-sensitive needs, such as purchasing equipment or covering unexpected costs.
Key Features of SBA Express Loans
- Fast Processing: Faster approval times compared to traditional SBA loans.
- Maximum Loan Amount: Up to $500,000, which is ideal for smaller capital needs.
- Competitive Rates: Interest rates are generally the prime rate plus an additional margin, typically ranging from 4.5% to 6%.
How to Apply for an SBA Auto Body Shop Loan
Applying for an SBA loan can seem overwhelming, but the process becomes manageable with the right lender. Partnering with a lender experienced in SBA loans for auto body shops can make a significant difference. These lenders know the ins and outs of SBA applications, making them better equipped to assist you through the process.
Steps to Apply:
- Assess Your Business Needs: Determine how much funding you need and how you will use it. This could be for purchasing new equipment, expanding your shop, or acquiring another business.
- Choose the Right Loan Type: Based on your requirements, decide if the SBA 7(a) or Express Loan suits your needs better.
- Connect with an SBA Lender: Work with an SBA-approved lender experienced in the auto body industry. This can expedite your approval process and increase your chances of success.
- Prepare Your Documents: You will need financial statements, tax returns, business licenses, and a detailed business plan.
- Submit Your Application: Complete your application with the lender’s help, making sure all necessary documentation is included.
Top Reasons to Own an Auto Body Shop
Owning an auto body shop offers several advantages, including being your own boss and enjoying steady demand. Many successful body shop owners started out working for others before realizing the profitability of starting their own shop. When you own your shop, you control the pricing, customer service, and quality of work, which ultimately determines your business’s success.
With the surge in vehicle repair needs, owning an auto body shop is becoming increasingly lucrative. High demand, combined with rising vehicle prices, means that auto body shops are rarely short on work.
Why GoSBA Loans?
GoSBA Loans specializes in connecting auto body shop owners with the right SBA lenders. We understand the specific needs of the automotive industry and work closely with our network of lending partners to find the best loan options available. Whether you need a 7(a) loan for expansion or an Express Loan for a quick purchase, GoSBA Loans is here to help you through every step of the process.
Ready to Get Started?
Reach out to us today to find out how we can help secure the best SBA loan for your auto body shop. Visit gosbaloans.com or call 1-855-381-6448 to speak with a specialist.
Ishan Jetley
http://gosbaloans.comIshan Jetley is the owner of GoSBA Loans. I have assisted 100's of businesses with their business loans. I specialize in SBA financing for working capital, real estate and business acquisitions.