Auto Repair Shop Loans up to $525,000
Are you an auto repair shop owner looking to strengthen and grow your business operation? We’ve helped many repair shops do just that. We can approve you for up to $525,000 within 2 business days. Find out if you qualify instantly with no obligations, no impact on your credit score, and no fees.
The auto repair industry generated about $68 billion in 2021. If you’re one of the 264,000+ auto repair shop owners trying to tap further into the market, sometimes you need additional capital to grow faster.
Whether you’re looking to open a new shop, buy more tools, or hire more workers, you have several options available. To learn how auto repair shops can gain additional funds, continue reading.
What are Auto Repair Shop Loans?
Running an auto repair business requires stable cash flow and sufficient working capital. It’s not uncommon for auto repair shop owners to need additional resources to grow their operations.
The equipment needed to provide auto repair services isn’t cheap, nor is the labor. Other costs such as rent and marketing are also significant. Auto repair shop loans are financing options available to auto repair businesses to help them grow their business. These small business loan options come in various types and with varying terms and requirements.
Types of Auto Repair Shop Financing
Each type of loan has its own characteristics, such as the amount available, qualification requirements, and terms. Here is an overview of the most popular funding solutions for auto repair shops.
A merchant cash advance provides your auto repair business with an upfront lump sum of cash, which is then repaid through a set percentage of the business’s future sales. This type of financing is often used by mechanic shops that need quick access to capital but don’t have the time, resources, or qualifications to go through a traditional lending process.
An auto repair shop business line of credit (LOC) is a revolving line of credit. It allows you to borrowing repeatedly as long as you pay down the balance at the end of each month. Typically amounts can range from as little as $1,000 to $250,000.
Auto repair shop small business loans offers a lump sum of cash for a fixed term. The funds are deposited directly into your bank account. Auto repair business loans are repaid over a set period depending on the loan amount and repayment agreement, typically 1 to 5 years. Small business loans for auto repair shops may carry lower interest rates than other options but have much stricter requirements.
Auto repair shops use a range of tools and equipment when fixing vehicles. These tools and equipment are expensive to buy, require continuous maintenance, and must be replaced over time. The purpose of auto repair shop equipment financing is to buy and maintain shop equipment.
SBA loans offer flexible repayment terms and interest rates for auto repair shops. If you apply for SBA financing, it has strict lending criteria. The most applicable types for auto mechanics would be 7(a), 504, and microloans.
How Do Auto Repair Shop Loans Work?
Auto repair shop loans are convenient for the smooth day-to-day running of your business. However, it is advisable to use the loan appropriately to ensure that it generates profits and repays itself.
Ways to Use Auto Repair Business Loans
Financial experts recommend getting a loan only when you need it. It is essential to have a clear plan of how you intend to use the money and stick to it. The ideal uses of an auto repair shop loan may include:
- Starting a new auto repair shop or expanding an existing one
- Paying rent and other utility fees such as electricity and water bills
- Paying insurance premiums
- Repairing and maintaining old equipment
- Buying new equipment
- Paying salaries and financing day-to-day expenses
- Advertising and marketing
How to Qualify for an Auto Repair Shop Loan (with the Best Rates)
Each of the types of loans discussed above has varying requirements for qualification. Here are five tips on how to increase your repair shop’s likelihood of qualifying for a loan with the best rates:
- Build a strong business plan
- Have good sales history
- Build a good credit score
- Prepare the necessary financial documents
- Consider using collateral or a co-borrower to strengthen your approval chances
Where to Get Auto Repair Shop Financing
Many traditional banks don’t offer business financing solutions. Those that do typically have strict requirements or require collateral. Online lenders are more flexible and can work with lower credit scores, weaker sales history, and newer car repair shops.
Consider applying for up to $500,000 with mCashAdvance™ to fund your auto repair business!
How to Apply for the Best Auto Repair Shop Funding
Eligibility Requirements
To be considered by mCashAdvance™, you must meet the following requirements:
- A citizen or permanent resident of the United States
- Minimum age of 18 is required
- At least six months in business
- 500+ credit score
Funding Limits
Depending on the health of your business and its financial situation, you may be eligible to receive up to $500K.
Term Length
Depending on how much funding you receive and how much business you do, you’ll have a different length of time to repay the merchant cash advance.
Pros and Cons of Auto Repair Shop Loans
A loan for auto repair businesses is convenient if your business is struggling financially. However, it also has its shortcomings, as discussed below.
Pros of Auto Repair Shop Loans
The advantages of an auto repair shop business loan include:
- You get money to boost your cash flow and working capital
- You can get new equipment to maximize your shop’s productivity
- You can use the funds to grow and expand your business
- Repaying a loan helps improve your credit score
Cons of Auto Repair Shop Loans
The disadvantages of a business loan include:
- Loans come with an interest that must be paid
- Some loans have short repayment terms
- Most loans have strict qualification requirements
Alternatives to an Auto Repair Shop Loan
A car repair shop loan has its disadvantages, as discussed. Fortunately, there are several alternatives, including:
- Grants from local, state, and federal government agencies
- Crowdfunding from friends and strangers
- Peer-to-peer lending from friends, family members, and professional partners
- Funding from venture capitalists and angel investors
- Personal funding through bootstrapping
Other Industries We Finance
Auto Repair and Mechanic Shop Financing Frequently Asked Questions
There are several financing options available to car repair shops. Merchant cash advances, business credit cards, and business lines of credit are the most common ways to fund a startup.
We offer funding solutions to qualified business owners of up to $500,000. Find out if you qualify with no obligations or fees by applying today!
A small business loan term depends on many factors, including the type of loan you receive and the amount. Typically, small business loans can last from a few months to several years.
Yes, some lenders will still provide loans to auto repair shop owners with bad credit. However, many will require you to have at least a credit score of 670+ to qualify for more favorable terms.
Many lenders offer short-term business loans for small business owners, including those in the auto repairs industry. The terms typically range from a few months to a year, subject to lender approval.
Funding Your Business Is Our Business
Auto Repair Shop Loans Can Help Grow Your Business
The auto repair industry is expected to grow into the foreseeable future. This creates an opportunity for existing auto repair shops to grow and expand to more customers. Additional funding from these loans can help you grow your business by overcoming potentially crippling financial obstacles.
Different types of mechanic business loans have diverse requirements and application procedures. For example, a traditional bank loan has strict requirements, and you’ll likely need to complete the application in person. In contrast, an online lender typically offers more relaxed requirements.
Find The Best Payment Processing For Auto Repair Shops
Many payment processing companies that work with auto repair shops charge a high transaction fee or take a cut of the sale. Auto repair shops typically work with payment processors that specialize in auto repair. In reality, standard payment processing companies perform the same function as auto repair processors do. Changing from your current processor to a new one will save your auto repair shop a great deal of money. mCashAdvance™ already works with a lot of auto repair companies and would love to help you get rid of your credit card processing fees. mCashAdvance™ offers no fee credit card processing. Instead, a small fixed monthly fee is charged for as many cards as you process in a month. Because of the small fixed fee, you have certainty and save a lot of money by avoiding high processing fees.
Does Your Business Need Funding Today?
There’s no fee or obligation, and it won’t impact your credit.
$5,000 – $1,000,000
Talk to a rep at (855) 433-8641
Mon – Fri | 9:00am – 8:00pm