Auto Repairs & Sales
Meet seasonal demand, cover operational costs, and seize growth opportunities with flexible loan options. We provide quick, accessible funding to keep your business running smoothly.
Intro to Business Loans for for Auto Repair Shops & Car Dealerships
Introduction to Business Loans for Auto Repair Shops & Car Dealerships
Maintaining consistent service levels year-round is a costly endeavor for auto repair shops. They need to invest in expensive equipment, employ sufficient staff, and keep a substantial inventory of auto parts. These financial demands can become challenging to meet when equipment fails or extensive projects arise. Multiple projects requiring costly or numerous auto parts can quickly strain operational funds.
Car dealerships face similar financial hurdles when their resources are tied up in new vehicles and trade-ins. The industry’s seasonality, coupled with the need to cover dealership fees, run marketing campaigns, and offer discounts, exacerbates these challenges.
60Day Capital offers business loans tailored for auto repair shops and car dealerships that need additional cash to manage rising expenses and maintain competitiveness.
In this guide, we’ll address the following questions and more:
- What Are Business Loans for Auto Repair Shops and Car Dealerships?
- How Do Business Loans for Auto Repair Shops and Car Dealerships Work?
- What Are the Advantages of Business Loans for Auto Repair Shops and Car Dealerships?
- What Are the Disadvantages of Business Loans for Auto Repair Shops and Car Dealerships?
- Who Qualifies for Business Loans for Auto Repair Shops and Car Dealerships?
- How to Apply for Business Loans for Auto Repair Shops and Car Dealerships
- What If I’m Declined for a Business Loan?
What Are Business Loans for Auto Repair Shops and Car Dealerships?
60Day Capital offers a variety of business loans tailored to the cash flow cycles and recurring expenses of auto repair shops and car dealerships. These loans can cover temporary and large-scale costs, bridge revenue gaps while waiting for compensation, and help maintain smooth operations.
Business loans for auto repair shops and car dealerships can include:
Working Capital Loans
Revenue-Based Financing
Business Term Loans
Business Line of Credit
SBA Loans
Merchant Cash Advance
Equipment Financing
How Do Business Loans for Auto Repair Shops and Car Dealerships Work?
Business loans for auto repair shops and car dealerships can be used for a variety of purposes and come with different repayment structures tailored to specific needs.
For instance, if your auto parts supplier offers a discount on snow tires during the slow season, but you won’t sell them until next season, a Merchant Cash Advance or Working Capital Loan might be ideal. With a Merchant Cash Advance, you can make smaller payments until business picks up. A short-term Working Capital Loan would allow you to finish payments by the time new revenue comes in, keeping your profits intact.
If you need to cover payroll and regular expenses while working on large projects or waiting for insurance compensation, a Business Line of Credit might be the best option. This product suits short-term, medium-sized expenses and is most cost-effective when you can pay off the balance in a few months.
For car dealerships, inventory is a significant expense, especially when selling used cars. A Working Capital Loan can cover operational costs while purchasing large vehicle quantities. Additionally, we can provide funds for marketing your new inventory, helping you sell used vehicles quickly and maximize profitability.
Business Loan Options Compared
LOAN TYPES
MAX AMOUNTS
RATES
SPEED
- Merchant Cash Advances
- $5k – $1m
- Starting at 1-6% p/mo
- 1-2 business days
- SBA Loan
- $50k-$5.5m
- Starting at Prime + 2.75%
- 8-12 weeks
- Business Term Loan
- $10k to $5m
- Starting at 1-4% p/mo
- 1-3 business days
- Business Line of Credit
- $1k to $1m
- Starting at 1% p/mo
- 1-3 business days
- Receivables/Invoice Financing
- $10k-$10m
- Starting at 1% p/mo
- 1-2 weeks
- Equipment Financing
- Up to $5m per piece
- Starting at 3.5% (SBA)
- 3-10+ business days
- Revenue Based Business Loans
- $5K – $1m
- Starting at 1-6% p/mo
- 1-2 business days
What Are the Advantages of Business Loans for Auto Repair Shops and Car Dealerships?
Business loans empower auto repair shops to meet demand promptly, which can surge unexpectedly. In bustling neighborhoods with many auto shops, not having the staff or inventory to handle jobs immediately can result in lost customers. Business loans ensure you have the resources to take on virtually every appointment that comes your way.
Additionally, these loans enable you to accept lengthy and expensive projects without jeopardizing your ability to pay other bills. Insurance reimbursements for some projects can take a long time, but a business loan lets you say “yes” even when operational expenses might say “no.”
For car dealerships, business loans allow you to cater to your target buyers’ preferences. This might involve purchasing large quantities of specific vehicles, renovating waiting areas, or enhancing digital marketing efforts. Research indicates that millennials visit at least 18 websites for recommendations or price comparisons before heading to a dealership, making strong advertising crucial to stand out from the competition.
Finally, business loans from companies like 60Day Capital are more accessible than traditional loans. Minimal paperwork is required, and you can receive funding within 24-48 hours without needing excellent credit, perfect cash flow, or collateral. This quick access to funds ensures you can handle new expenses as they arise without worrying about meeting steep requirements or enduring lengthy wait times.
What Are the Disadvantages of Business Loans for Auto Repair Shops and Car Dealerships?
The accessibility of business loans can lead to the temptation to seek funds that aren’t truly necessary. For example, consider a scenario where a newly-released piece of equipment promises increased efficiency. This may seem like a great opportunity for Equipment Financing. However, if the equipment becomes obsolete in just two years, leasing would have been a more financially sound decision than buying.
Large expenditures often generate additional costs, complicating the determination of the exact amount to borrow. Suppose you’ve purchased new equipment to offer additional services. Are your employees trained to use this new equipment? Training programs come at a cost, and the new equipment hasn’t yet generated revenue.
Similarly, after ordering expensive parts for a large project, you might realize that you need more employees to complete the project on time. Do you have the resources to pay these employees if demand decreases after the project is finished?
Choosing the correct borrowing amount and repayment structure requires thorough research of your options beforehand. Unfortunately, many business owners don’t have the time to study business loans while managing their daily operations, making it challenging to make informed borrowing decisions.
Who Qualifies For Auto Repairs & Sales?
Approved businesses generally met the following criteria:
ANNUAL REVENUE
$75K+
CREDIT SCORE
550+
TIME IN BUSINESS
6 months+
How to Apply for Business Loans for Auto Repair Shops and Car Dealerships?
Applying for a business loan requires minimal paperwork and typically results in funding within three business days. Here’s a step-by-step guide:
Step 1: Choose the Right Product
Begin by selecting the loan product that best addresses your needs. Research is essential, as each loan type is tailored to different expenses and cash flow cycles. Determine if your need is for a short-term or long-term cost and whether demand is expected to rise or fall in the coming months. Understanding the purpose of the funds will also help identify the appropriate borrowing amount and terms.
Step 2: Gather Your Documents
Prepare the following documents and information for the application process:
- Driver’s license
- Voided business check
- Bank statements from the past three months
- Invoice for equipment (for Equipment Financing)
- Credit card processing statements from the past three months (for Merchant Cash Advance)
For SBA Loans, additional documents are required. Refer to our SBA Loan page for details.
Step 3: Fill Out the Application
Start your application by either calling us or completing our one-page online form. Provide the gathered information and specify your desired funding amount.
Step 4: Speak to a Representative
After submitting your application, a representative will contact you to discuss the repayment structure, rates, and terms of your available loan options. This ensures transparency and helps avoid unexpected fees during repayment.
Step 5: Receive Approval
Upon approval, funds for Business Term Loans, Business Lines of Credit, Working Capital Loans, Equipment Financing, Merchant Cash Advance, Revenue-Based Business Loans, and Accounts Receivable Factoring will typically appear in your bank account within 24 hours to one week. SBA Loans usually take 3-5 weeks for funding.
Your Business Financing Gets Set Up – Now What?
Your business loan is more than just a financing tool; it’s an opportunity to build or improve your credit.
No matter the type of loan you secure, ensure all payments are made on time and in full. If you have a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently meeting your financial obligations will positively impact your credit score. This, in turn, can lead to preferred rates and terms when you need business financing in the future.
What If I’m Declined for a Business Loan?
If your application is declined, it may be due to selecting the wrong product for your cash flow needs. In such cases, we can recommend a different product with a more suitable repayment structure.
Alternatively, we may determine that taking on more debt isn’t feasible for your business at this time. In this scenario, a business credit card or personal loan might be more appropriate. Both options are generally easier to qualify for and can be accessed through 60Day Capital.
If a low credit score is the issue, consider utilizing credit repair services. We can help identify factors lowering your score and develop solutions to improve it.
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