When a Mount Pleasant, MI auto shop borrows for lifts or parts stock, lenders review its bank deposits, tax returns, existing payments, the owner's credit, the equipment quote and the lease. Lifts go on an equipment loan; parts go on a line.
Saltmead Funding Group in Mount Pleasant, Michigan explains what lenders review when a repair shop borrows, which funding fits lifts and parts, and what buying a shop involves.
Lifts and diagnostic equipment on an equipment loan
Lifts, alignment racks, scan tools and ADAS calibration rigs fit an equipment loan or lease. The equipment secures the loan, the partner usually pays the dealer, and the shop owns the equipment once the last payment is made. Installation, concrete work for a lift and training can sometimes be included if they are on the quote.
Illustration only, invented figures: $44,000 for two lifts and a scan tool over 60 months at an annual rate of 10.5% would cost about $946 a month. See the equipment financing page.
Diagnostic and calibration equipment goes out of date sooner than a lift, because vehicle systems change. A lease that allows an upgrade at the end can suit a scan tool or an ADAS rig, while a lift that stays in the floor for years suits a loan.
Parts stock on inventory financing or a credit line
Parts stock is a repeating cost: the shop buys parts for each job before the customer pays. A business line of credit drawn for parts and paid down as jobs are paid fits that pattern. A shop that stocks tires or keeps a large parts room can look at inventory financing, secured by the stock itself.
Illustration only, invented figures: on a $25,000 line with $12,000 drawn for parts at an annual rate of 13.5%, a month of interest is about $135. See inventory financing and credit lines.
A parts supplier's own credit terms can also carry stock for a few weeks. Compare the supplier's terms with a line of credit: the supplier program covers only its own parts, while the line covers any supplier and payroll too.
What lenders review from a repair shop: bays, revenue and statements
Lenders review a repair shop's bays and revenue together: how many bays, how many technicians, what the average repair order is, and what the deposits show over twelve months. They read the last two tax returns, existing equipment payments, the owner's credit, the lease term and the quote for what the money buys.
Of the 37 auto repair and maintenance employers in Isabella County, MI in 2023, 19 had fewer than five employees, and together they employed 218 people (County Business Patterns). A small shop's statements carry a lot of weight in that review.
A partner may also ask how much of the shop's revenue comes from a few fleet or dealer accounts. A shop that depends on one large account carries more risk than one with many retail customers, and showing the mix helps the review.
Buying an existing shop in Isabella County, MI: notes for Mount Pleasant, MI owners
Buying an existing shop in Isabella County, MI is a term loan for the business: its equipment, its customer base, its name and the lease or the building. The partner reads the seller's returns, the equipment list, the lease and the reason for the sale. A seller note or a staged handover can help.
Nonemployer Statistics, a separate program, counted 46 auto repair businesses without paid employees in Isabella County, MI in 2024. The term loans page covers acquisitions.
Ask the seller to stay on for a few weeks after closing to introduce the buyer to customers and suppliers. A partner reading a purchase request sees a staged handover as a sign the customer base will stay.
An invented lift purchase and parts line for a two-bay shop
Illustration only, invented figures: a two-bay shop adds a lift on a $44,000 equipment loan at about $946 a month and opens a $25,000 parts line. In a month with $12,000 drawn, the line adds about $135 in interest, so the two together cost about $1,081 that month, by our arithmetic.
The shop sets that total against its slowest month's revenue before deciding. The auto repair shop loans page lists more equipment types.
A shop can also ask the partner whether the lift and the parts line can be reviewed together, since one review of the shop's statements can cover both requests and keep the payments planned as one budget.
Records to pull before an Isabella County, MI repair shop calls
- Twelve months of business bank statements
- The last two business tax returns
- A list of equipment loans and leases with payments
- The dealer quote with make, model and installation
- The lease, with its end date
- For a purchase: the seller's returns and equipment list
Call (989) 279-5824 with the quote or the asking price.
By Saltmead Funding Group · Updated
