SBA Loan Auto Body Shop Weathers Expansion
Author: Valerie Mellema
Date posted: 11.03.23

Located in the midwestern United States in the suburb of a large city, a thriving auto body shop recently required additional capital. The company was doing well and making a name for itself, but even a flourishing business can run into problems, which is precisely what occurred in this case.

The Shop’s Big Problem

The auto body shop was successful, but the owner believed it could improve further with a larger facility for more workers and projects. There were no issues with the labor force or the parts supply. The company decided to move to a larger facility to be more competitive with other auto shops.

 

The decision to pursue the auto body shop’s expansion would be expected to create new opportunities. For example, productivity could increase significantly, and as a result, additional customers were likely to start using the company for their auto repair needs. This, in turn, could lead to further growth and success for the business. The only problem was that this kind of auto body shop’s expansion would be expensive. Additionally, the business wasn’t thriving to the point where funding new real estate would be simple. This presented a significant challenge for the company’s growth plans.

Auto Body Shop's Expansion SBA Loan

The Amount of Money Needed to Expand

Instead of giving up, the company owner made an active decision to move forward with research. They discovered that fulfilling the brand’s goal of expanding into a larger facility with all the necessary equipment would require about $750,000. This substantial amount needed to accommodate their expansion plans was a significant finding. While some costs could be covered by earlier revenue, the rest would necessitate a loan. Through diligent searching, the company successfully secured the required amount for expansion. Moving into a larger facility posed risks but became feasible with a reliable lender’s support.

 

The Use of the SBA 7(a) Loan to Acquire Proper Facilities

Ultimately, this midwestern shop made an active choice to take out an SBA 7(a) loan. The loan offered coverage for real estate, business expansion, working capital, and equipment purchases. The company believed it met the loan qualifications. These qualifications included maintaining a good personal credit score, showing profitability for at least two years, and providing real estate collateral, among other factors.

Reasons for Choosing an SBA 7(a) Loan

The shop opted for an SBA loan due to its remarkably low interest rates. Additionally, it didn’t hurt that term lengths could extend up to 10 years, and the loan amounts had the potential to reach as high as $5,000,000.

 

A Happy Ending for a Growing Shop

In the end, the auto body shop found the success it hoped for. Thanks to the larger space, they could accommodate more customers, and additionally, there was ample room for additional equipment and employees. This strategic move allowed the company to boost its revenue. It also enabled the company to continue growing steadily toward a truly bright future.

Auto Body Shop's Expansion SBA Loan
About The Author | Valerie Mellema

Valerie has over 16 years of experience as a professional writer of blogs, eBooks, articles and press releases, with a focus on finance and alternative lending. Valerie resides with her family in Texas and is passionate about her horses.

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