Need Financing For Your Auto Repair Shop? Here Are 3
As long as people drive, there will be a demand for auto repair shops. But like any business, starting and running one takes money. Exploring one or more of the following options may help you find the right financing for your auto repair shop.
Traditional Bank Loans
For established businesses, traditional bank loans may be the go-to financing option. They can offer large amounts of funding with relatively low-interest rates. Unfortunately, these may be out of reach for newer businesses. Traditional banks generally want borrowers who have an established and strong credit history, making this a potentially difficult route for fledgling auto repair shops. Banks may also want collateral, and the repayment schedule may be unforgiving for repair shops with variable cash flow from month to month.
Loans with backing from the Small Business Administration (SBA) aim to relieve some of the hurdles less-established businesses face when it comes to finding the right financing. The SBA’s backing makes it easier for lenders to tolerate the risk of extending funds to borrowers. The application process for these loans is detailed and time-consuming, however. If you have the time, it’s definitely worth exploring, but don’t underestimate the task of applying for an SBA loan.
Many business leaders have decided that alternative lenders are the right financing option. The strengths of alternative lenders generally have to do with removing hurdles: They usually have quicker application processes and lower thresholds for approval. These lenders tend to not penalize less-established businesses as harshly as traditional banks, focusing more on potential than past results. Sometimes this comes at the cost of somewhat higher interest rates, but an alternative lender may nonetheless be the best financing option for many auto shops.
Learn Your Options with Freedom Capital Solutions
To learn more about the financing routes available for your business, get in touch with Freedom Capital Solutions.