Auto Repair Shop Business Loans

Obtaining a Loan for an Auto Repair Shop

Just like every other business, an auto repair shop requires enough access to funds for growth. Most of the top companies in the automotive repair service industry today have managed to grow due to ready access to financing options. A common and major challenge often faced by auto repair shop owners is the lack of cash flow in their business. This is exactly where an auto repair shop loan can play a major role.   

Auto repair shop loans can be quite difficult to access, especially through local banks. However, there are financing options available even for business owners with less than perfect credit scores.

                      Thinking of getting a loan for your auto repair shop? Apply Here.

How Auto Repair Shop Loans Work

Obtaining an auto repair shop loan is one of the quickest means of financing an auto repair business. These loans offer financing opportunities that enable the business to purchase equipment, fund operations and cover other necessary expenses. Auto repair loans can also be for more specific uses. Loans are often in the range of $5,000 to $5 million, depending on the size of the business and its annual revenue. Also, the loan term and rate will depend on the type of auto repair shop loan you intend to obtain.

Who Can Obtain an Auto Repair Shop Loan?

If you’re looking to take your auto repair business to the next level, obtaining an auto repair shop loan as a funding source to improve your service delivery could be the best option. This loan can be used for practically any form of auto repair shop expense. To be eligible for the loan, your business must have been in active operation for more than 6 months. A less than perfect credit score is okay. Your business’s annual revenue could also influence the loan approval. Lenders look favourably on businesses that are doing well in terms of revenue generation when looking to extend loans.  

                             Are you Eligible for an Auto Repair Shop Loan? Apply Now!

Major Types of Auto Repair Businesses That Can Obtain Loans

  • Wheel Alignment Shops
  • Oil Change Lube Shops
  • Glass Replacement Shops
  • Auto Paint Shops
  • Auto Body & Collision Repair Shops
  • Radiator Repair Shops
  • Tire Repair Shops
  • Tune-Up Shops
  • Transmission Repair Shops

Available Financing Options for Auto Repair Shops

There are several loan options for auto repair shop owners looking to finance and improve their business and sustain growth. They include:

  1. SBA Loans:

    The Small Business Administration loan program is guaranteed by the federal government to cover a certain portion of the loan expenses if something goes wrong with the loan. Despite the guarantee, most local banks are selective when offering an SBA loan. However, some certified lenders are always willing to offer one. Generally, the SBA loan was designed to serve as an alternative loan option for small businesses that are finding it difficult to get approved for traditional financing.

  2. Short-Term Loans:

    As the name suggests, short-term loans are designed to span a short period of time. In essence, they’re suitable for covering quick business expenses. Typically, short-term business loans come with a short repayment term ranging from three months to three years. For auto repair shop business owners looking to inject quick cash into their business, a short-term loan could be the best option.

  3. Merchant Cash Advances:

    This financing option may not be directly regarded as a loan program for auto repair shop owners, as merchant cash advance companies don’t actually lend money to auto repair shops. However, they often purchase future credit in return for providing upfront cash for small business, which an auto repair business can also benefit from. Merchant cash advances often come with different rates and repayment terms, depending on the lender.

  4. Business Line of Credit:

    A business line of credit is one of the easiest ways for small businesses to access quick funds, repay the amount borrowed, and access funds again. The flexibility of lines of credit has made them a go-to financing option for most small business owners. A business line of credit differs from most conventional loans in that the borrower is given access to a lump sum which he/she can withdraw little by little based on the amount they need. They pay interest only on the withdrawn amount.

  5. Equipment Loans:

    As the name suggests, equipment loans are loans offered by lenders to small businesses so they can purchase equipment needed for their operations. Many auto repair shops rely on equipment loans to finance their businesses.

Loan Terms for Each Financing Option

SBA Loans

  • Loan amounts up to $50,000
  • Repayment terms ranging from 5-25 years
  • Interest rates start at about 6%

Short-Term Loan

  • Loan amounts of $5,000 to $500,000
  • Repayment terms of 3 months to 3 years
  • Interest rate of about 10%

Merchant Cash Advances

  • Loan amount of $5,000 to $500,000
  • Repayment term of 3 months to 2 years
  • Interest rate starting at about 16%

Business Line of Credit

  • Credit line up to $500,000
  • Weekly or monthly period payment for up to a year
  • Interest rates as low as 14%

Equipment Loan

  • Loan amount of $5,000 to $150,000
  • Repayment term of 2-5 years
  • Interest rate of about 11%

Why Globelend Capital?

If you’re in need of financing for your auto repair business, an auto repair loan from Globelend Capital is your best option. At Globelend Capital, we’ll connect you with lenders who can provide the loan you need to improve the performance of your business. We work only with lenders that offer reasonable loan terms. No hard collateral needed! Contact us today and let us connect you with lenders for your auto repair shop loan.   

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