Yes. A mechanic can finance lifts, scan tools and other shop equipment with equipment financing secured by the equipment, and can buy an existing repair shop with a term loan supported by the shop's repair history and the buyer's down payment.
An article from Flintview Business Capital in San Luis Obispo, California on how auto repair shops finance lifts, tire machines, compressors, parts and tire stock, and the purchase of an existing shop, with San Luis Obispo County, CA counts.
Buying an Existing Auto Repair Shop: What San Luis Obispo, CA Repair Shops Should Know
Buying an existing auto repair shop means buying its customers, its technicians, its location and its equipment. A term loan is the usual structure: the buyer puts money down, and the loan covers most of the rest. A partner reads the seller's repair orders, tax returns and bank statements, the lease or the building's value, and the buyer's own experience.
Illustration only, invented figures: a shop priced at $290,000 with $58,000 down leaves $232,000 to finance. Over 120 months at an annual rate of 9.75%, the payment would be about $3,034 a month (our arithmetic). The buyer can set that against the shop's monthly cash flow after wages, parts and rent.
County Business Patterns counted 154 automotive repair and maintenance establishments with paid employees in San Luis Obispo County, CA for 2023, with 873 paid employees; 55.8% had fewer than five employees. See business term loans.
Before making an offer on a shop, a buyer can ask for three years of repair-order history, the list of equipment with its age, the lease terms and how many of the technicians plan to stay. Customers may follow the technicians, so a partner will ask the same question. A transition period with the seller working alongside the buyer, written into the purchase agreement, can help both the business and the request.
Some sellers carry part of the price as a seller note. A partner will read that note's terms, because the shop has to carry both payments from the same repair orders.
Auto Repair Equipment Financing Options: Tire Machines and Tire Stock
Tire machines, wheel balancers and tire stock usually travel together. The machines are equipment; the tires on the rack are inventory, bought before they sell. Financing them separately lets each be paid down on its own schedule.
Illustration only, invented figures: $18,500 of tire machines and balancers over 48 months at 11% is about $478 a month; $22,000 of tire stock can be financed as inventory and paid down as tires sell (our arithmetic). See inventory financing.
Tire stock turns over at different speeds by size; the shop's own sales history by size is a sound guide tohow much to hold. A partner reading an inventory request will ask how long the current stock takes to sell, so print that report before calling.
2 Post Car Lift Financing When a San Luis Obispo, CA Auto Repair Shop Needs Wheel Balancers
Two-post lift financing usually includes installation and, where needed, slab work. A shop adding a lift may add a wheel balancer at the same time. Illustration only, invented figures: a $9,800 lift installed plus a $7,400 balancer, $17,200 in all, can be one equipment agreement (our arithmetic).
A partner may ask about the lease, because a lift is bolted to the floor: a lease with little time left can limit the term a partner will offer. See equipment financing.
Shops planning a second lift should also check the bay: ceiling height for the lift's full rise, slab thickness and the space needed to work around a raised vehicle. The installer's site check answers those before the order is placed, and any slab work belongs in the same request.
Tire Shop Equipment Financing When a San Luis Obispo, CA Auto Repair Shop Needs Air Compressors
Air compressors, impact tools and air lines are a small but essential equipment line for a tire shop or a general repair shop. A $6,500 compressor (illustration only, invented figure) is modest enough to compare a short equipment agreement with a credit-line draw on total cost.
Nonemployer Statistics counted 242 automotive repair businesses without paid employees in San Luis Obispo County, CA for 2024, a separate program from the employer count above.
Shop management software, diagnostic subscriptions and the specialty tools newer vehicles require are running costs that grow with the shop. Listing them beside the loan payments shows a partner the full monthly cost of the equipment a request adds.
Repair Orders, Parts Invoices and a Seller Ledger: A Mechanic File in San Luis Obispo County, CA
A mechanic's funding file is built from the shop's own systems and the seller's books:
- Repair orders by month, with car count and average repair order.
- Parts invoices and supplier terms.
- A year of business bank statements plus the shop's last two returns.
- For a purchase: the seller's ledger, the asking price and the lease.
- Quotes for lifts, tire machines or compressors.
With those, a partner can see whether the shop, or the shop being bought, can carry the new payment. See auto repair shop loans and the San Luis Obispo, CA page.
By Flintview Business Capital · Updated
