Finimpact

Best Auto Repair Business Loans

If you’re ready to launch or grow your auto repair shop, there’s a good chance you have many expenses on your plate. That’s where auto repair shop loans come in. These products can give you the capital you need to meet your business goals.

Auto Repair Business Loans
Anna Baluch
Written by:Anna Baluch
Freelance Copywriter

Auto repair shops, just like most automotive businesses, come with hefty upfront costs. In addition, they are known for slow and busy periods as well as fluctuating cash flow, which can make it difficult to budget for and cover your expenses.

With the right financing, you can resolve these unique financial challenges with ease. Whether you’re a startup or have been a key player in the auto repair industry for years, auto repair shop loans, which we’ll discuss further below can set you up for success.

Our Top Picks for Best Auto Repair Business Loans

credibly
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Credit Score
Min. Credit Score 500+
Loan Amount
Loan Amount $5K-$400K
Loan Repayment
Loan Repayment 6-18 months
biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
forafinancial
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Credit Score
Min. Credit Score 550+
Loan Amount
Loan Amount $5K-$750K
Loan Repayment
Loan Repayment 4-15 months

How to Choose the Best Auto Repair Shop Loan

If you’d like to obtain financing for your auto repair shop, rest assured that there are many options available to you. As long as you consider your unique situation and weight the pros and cons of each, you’ll be able to find the right solutions. While ranking the best auto repair shop loans in 2022, our experts focused on these factors.

  • Loan Features: Loan features account for loan terms, loan amounts, and repayment schedules. Some lenders offer long terms, large amounts, and flexible repayment schedules, which are preferred for auto repair shops while others have shorter terms, smaller amounts, and less repayment flexibility.
  • Application process: The application process may be straightforward and online with fast approval and funding. Or it may take some time and require extensive documentation. In addition, it might include a prequalification feature where you can check your loan offers without any impact to your credit. An easy application with prequalification is ideal for auto repair shop loans.
  • Interest rates and fees: Minimum and maximum interest rates and fees vary greatly from lender to lender. As an auto repair shop owner, low rates and minimal to no fees are your best bet.
  • Qualification process: While some lenders require stellar credit, substantial annual revenue, and at least a few years in business, others are more flexible and open to lending to auto repair shop startups and newer businesses.
  • Customer support: Customer support refers to how easy it is to contact lenders any time you have questions or concerns about your auto repair shop loan. Support is usually offered via phone, email, and live chat.
  • Online user reviews: Third-party reviews on sites like TrustPilot and Better Business Bureau (BBB) can explain a lender’s reputation and customer service ratings.
  • Perks and Bonuses: Some lenders go the extra mile and ofer perks like hardship assistance, mobile apps, and free credit score monitoring. These extras can make certain auto repair shop loans more attractive.

Best Auto Repair Shop Loans for 2022 - Full Overview

1. Credibly: Best for Equipment Financing

Credibly is a Michigan-based online lender that offers equipment loans. You can take out an equipment loan to cover equipment for your auto repair shop, like vehicle lifts, air compressors, battery chargers, engine hoists, and more.

Pros
Simple application process: You can apply online quickly, in about 10 minutes.
Bad credit accepted: As long as you have a credit score above 500, you may get approved.
Long repayment terms: Credibly allows you to repay your equipment loan over the working life of the asset, which should give you plenty of time.
Cons
High interest rates: Since the starting factor rate is 1.15, you might pay more on interest.
Fees: You may be on the hook for additional fees, like origination fees.
Slow funding: Compared to other lenders, Credibly’s funding time of up to 5 days is quite slow.


Credibly does not disclose any information on minimum credit score, minimum annual revenue, and minimum time in business for its equipment loans. Also, there are no details on the loan amounts or APR range. However, Credibly does state that you’ll be able to repay your equipment loan over the working life of your asset via monthly payments.

The Bottom Line

If you need funds to cover equipment for your auto repair shop, you may benefit from equipment financing from Credibly, even if you don’t have the best credit.

2.Biz2Credit: Best For Working Capital Loans

Biz2Credit working capital loans can help you cover everyday expenses for your auto repair shop, such as utilities and payroll. Borrowing amounts go up to $2 million and you can pay back what you borrow daily, weekly, or bi-weekly.

Pros
Fast funding: You may receive your funds within 24 hours of approval.
High borrowing limits: Biz2Credit working capital loans go up to $2 million so you can use them to pay for large expenses.
Quick application: Once you fill out an application, you’ll find out what you qualify for in minutes.
Cons
Strict eligibility criteria: Biz2Credit does have rigorous requirements that may be a challenge to meet, especially if your credit isn’t in the best shape.
Extra fees: Even though Biz2Credit is vague about its fees, you may be on the hook for origination fees between 1% and 6%.


Biz2Credit’s working capital loans range from $25,000 to $2 million with varying repayment terms. For a chance at approval, you need a minimum credit score of 575, at least $250,000 in annual revenue, and an 18-month business track record.

The Bottom Line

If you have a strong credit history and need cash to pay for the everyday costs of running your auto repair shop, Biz2Credit’s working capital loans might make sense.

3. Fora Financial: Best for Merchant Cash Advance

Fora Financial is a fintech lender that offers loans to a wide range of borrowers. As the owner of an auto repair shop, you can take advantage of its merchant cash advance, which lets you borrow against your future debit and credit card sales without the rigorous requirements of short-term business loans.

Pros
Flexible requirements: Fora will look beyond your credit score when reviewing your application so you can get approved with fair or poor credit.
Quick application: You can apply online within minutes, from the comfort of your own home or office.
Fast funding: Depending on when you apply, you may receive the funds in as little as 72 hours.
Cons
Rates might be high: If you have bad credit, you can expect higher than average interest rates, which can increase your overall cost of borrowing.
Fees: You might have to pay origination fees, late fees, and other fees in addition to interest.


To get a Fora merchant cash advance for your auto repairs shop, you’ll need a credit score of at least 500, $12,000 minimum in earnings, and six months of business under your belt. Loan amounts range from $5,000 to $500,000.

The Bottom Line

If most of your customers pay for their auto repairs via debit or credit cards, a merchant cash advance from Fora Financial is worth exploring.

4. BlueVine: Best for Lines of Credit

BlueVine is an online lender that offers business lines of credit of up to $250,000. With a line of credit, you can withdraw funds at any time, up to a set credit limit. You’ll only pay interest on the amount you borrow.

Pros
Simple Application: You can apply for a line of credit online, within minutes.
Quick Funding: Depending on when you get approved, you may withdraw funds fairly quickly.
Competitive Rates: If you have good credit, you may qualify for a low interest rate.
Cons
Limited Availability: BlueVine is only available in select states.
High Repayments: Since loan terms are fairly short (6 to 12 months), you may face costly repayments.


BlueVine’s unsecured lines of credit range from $5,000 to $250,000. You can choose terms of 6 or 12 months and land an APR as low as 4.8%. You’ll repay what you borrow plus interest on a weekly or monthly basis. BlueVine’s eligibility criteria includes a credit score of at least 600, six months or more in business, and at least $10,000 a month in revenue.

The Bottom Line

If you’re unsure of exactly how much capital and are seeking a flexible form of financing for your auto repair shop, a BlueVine business line of credit should be on your radar.

Try BlueVine

5. Torro: Best for Startup Loans

Torro is a lender that supports small businesses and entrepreneurs. If you’re ready to get your auto repair shop up and running, its start-up capital loan may be a smart option. You can use it to cover a number of startup expenses like equipment, inventory, payroll, marketing, and insurance.

Pros
Many Options: Torro can connect you to hundreds of financing options so you can find the ideal one for your specific budget and needs.
Flexible: You may use a Torro startup loan to pay for startup expenses for your auto repair shop.
Speedy Process:There is no paperwork or business appraisals so you may get your funds the same day you apply.
Cons
Potentially Higher Fees: Since start-up capital loans come with a greater risk, you may have to pay a higher than average interest rate.
Limited Chat Support: If you tend to use chat for support, it may not always work on the Torro website.
Good Credit: In most cases, you’ll need stellar credit for a Torro startup loan.


Torro’s start-up capital loans work like business lines of credit, which allow you to pull funds any time, up to a set credit limit. These loans go up to $100,000 and come with terms between 12 and 48 months as well as maximum APRs of 36%. Repayment terms vary. To be considered for a start-up capital loan, you’ll need a minimum credit score of 700 and a maximum revenue of $5,000 per month.

The Bottom Line

If you’re new to the auto repair industry and would like to launch an auto repair shop from scratch, a Torro start-up capital loan might be the ultimate financial resource.

6. SmartBiz: Best For SBA Loans

SmartBiz strives to offer affordable lending to small businesses in an effort to support local economies. It’s an SBA-approved lender, meaning it offers SBA loans that are partially guaranteed by the U.S. Small Business Administration. There are a variety of SBA loans, which offer competitive interest rates and lengthy repayment terms of up to 25 years

Pros
Low rates: If you have good credit, you can lock in a low interest rate with a SmartBiz SBA loan.
Long repayment terms: You’ll be able to spread your loan out over multiple years and take your time repaying it.
High borrowing limits: Depending on your finances and the SBA loan you choose, you can land up to $5 million in funding.
Cons
Extensive application: It will take some time to complete the rigorous application process, which requires a lot of information and documentation.
Fees: You might be on the hook for fees, like origination fees and maintenance fees in addition to interest.
Difficult to qualify for: You’ll need strong credit to take out an SBA loan.


SmartBiz SBA loans range from $30,000 to $5 million with repayment terms between 10 and 25 years. Interest rates cap out at 7%. For a chance at approval, you’ll need a credit score of at least 640 and a business history of two years or more.

The Bottom Line

As long as you have good credit and have had an auto repair shop for at least two years, SBA loans from SmartBiz can be an affordable option.

Best Auto Repair Shop Loans - Features Comparisons



Company Min. Credit Score Min. Time in Business Min. Annual Revenue Loan Amount Interest Rate
Credibly Not disclosed Not disclosed Not disclosed Not disclosed Not disclosed
Biz2Credit 575 18 months $250,000 $25,000 to $2 million
Not disclosed
Fora Financial 500 6 months
$12,000 minimum in earnings $5,000 to $500,000
Not disclosed
BlueVine 600 6 months $10,000 per month $5,000 to $250,000 Starts at 4.8%
Torro 700 Not disclosed $5,000 per month Up to $100,000 Maximum of 36%
SmartBiz 640 2 years Not disclosed Depends on the SBA loan type Not disclosed

What are the costs of running an auto repair shop?

The costs of operating an auto repair shop vary greatly and depend on a number of factors like your size, location, the type of equipment you choose, how you staff your shop, and more. On average, however, you can expect to spend somewhere in the $37,500 range. This figure includes expenses, such as:

  • Garage space: Your location will determine the cost of your commercial garage. In general, however, you can expect to pay $0.50 per square foot per month if you live in a rural area or small town and $5.00 per square per month if you’re in a large city.
  • Small repair tools: These may be screwdrivers, hammers, bolt extractors, pry bars, fuses, pliers, torque wrenches, cordless drills, and anything else your mechanics need to perform their jobs. You may spend anywhere from $1,000 to $2,000 or more.
  • Large repair tools: Large repair tools refer to diagnostics and OBD machines, engine cranes, and hydraulic lifts, which tend to be very expensive. You may spend $8,000 to $10,000 on them.
  • Administrative expenses: You’ll need to invest in licenses, certifications, and permits for your auto repair shop as well as insurance. These admin fees may run you between $5,000 to $6,000 per year.

How to Get an Auto Repair Shop Loan?

To improve your odds of qualifying for auto repair shop financing, keep these tips in mind.

  • Consider collateral: Since collateral reduces lender risk, it’s easier to get approved for a secured loan that involves collateral or a valuable asset you own, like your commercial vehicle or property. If you’re a startup or newer repair shop, you may want to secure your loan with collateral.
  • Build your business credit: Most lenders will consider your business credit history as it shows how likely you are to repay your loan. If you don’t have one, get a D-U-N-S number from Dun & Bradstreet and start working with vendors who will report your payment history to the bureaus. Note that this process will take time.
  • Do your research: Not all auto repair shop loans are created equal. It’s your job to shop around, explore your options, and apply to the financing solutions with criteria that you meet.
  • Solidify your business plan: Your business plan will explain your goals with your auto repair shop and what you intend to do with the loan proceeds. Make sure it’s professional and thorough before you send it to any lender.

How Can You Use Auto Repair Shop Loans?

Since auto repair shop loans are flexible, you can use them to cover a variety of expenses, such as:

  • Garage space: You’ll need a garage so that your mechanics have a place to perform their repairs. With an auto repair shop loan, you can obtain the funds you need to pay for one.
  • Equipment: Auto repair shops use no shortage of equipment. You may use equipment financing to buy or lease new or used equipment.
  • Marketing: To get your name out there and retain loyal customers, you’ll want to invest in marketing. Auto repair shop loans may help you pay for social media, Google ads, print materials, and other marketing initiatives.
  • Payroll: Auto repair financing might come in handy if you’re seeking funds to pay your mechanic and support staff. This is particularly true if you tend to face cash flow shortages during your slow season.
  • Expansion: There may come a time where you want to open new locations. Financing can help you take your auto repair shop venture to the next level.
  • Employee education: Your mechanics are your most important assets.That’s why you might want to invest in their education by financing the costs of classes and workshops that improve and advance their skills.

Types of Loans Available for Auto Repair Shops

The most common types of auto repair shop loans, include:

  • Short-term business loans: Short-term business loans usually come with terms that range from a few months to a few years. These products, which are easier to get than long-term loans, can help you borrow capital quickly and cover short-term expenses with ease.
  • Business lines of credit: Business lines of credit are a lot like credit cards with larger loan amounts. Since you can borrow as much or as little as you need, up to a set credit limit, this is a flexible financing option.
  • Equipment financing: Equipment financing is just what it sounds like: financing for any equipment you need to run your auto repair shop. It’s secured to your equipment so if you default, the lender will have the right to seize it.
  • SBA loans: Offered by individual lenders, SBA loans are guaranteed by the U.S. Small Business Administration. While SBA loans can be difficult to get, you can land large loan amounts and flexible repayment terms you might not be able to find elsewhere.
  • Merchant cash advances: Merchant cash advances give you upfront payment in exchange for a portion of your future debit and credit card sales. You’ll repay your advance via a percentage of your daily sales or fixed withdrawals from your bank account.

Succeed with Auto Repair Shop Loans

Whether your mission is to buy an auto repair shop franchise, start one from scratch, or grow your existing venture, auto repair shop loans have you covered. These financing solutions can ensure you have enough capital to cover your expenses and enjoy a thriving, fulfilling business today, tomorrow, and years down the road.

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