The auto repair industry has recovered from the pandemic fallout—which saw the number of cars on the road plummet. Moving forward, four trends will be driving the industry forward:
- Older cars—Higher prices and interest rates have resulted in a decline in new car sales. People keeping their cars longer/racking up the miles—the average odometer display is 147,000 to 166,000—means maintenance and repairs become more necessary.
- Enhanced technology—The increased use of software vehicle systems in engines and car electronics means software knowledge has become a core competency factor for car mechanics.
- Smaller DIY auto repair market—The enhanced reliance on advanced computer systems in cars means fewer do-it-yourselfers have the ability to tinker with/repair their own vehicles.
- New emission regulations—As more states follow California’s lead to move toward zero-emission vehicles, auto repair shops will need to acquire the technology and tools needed to diagnose and service the powertrain components of these vehicles.
The ongoing evolution of auto repair means there are a number of reasons an auto repair shop may seek alternative lending business loans, including upgrading equipment, expanding operations, scaling marketing and advertising costs and even opening a new shop. The good news for auto repair shop owners is there are several types of business loans that may be right for their needs:
- Equipment loans—A business loan to finance equipment can support the purchase of the latest technology and equipment to be able to provide cutting-edge service. These loans can be structured as lease-to-purchase or fixed-term, with the equipment itself serving as collateral.
- Lines of credit—Similar to a credit card, a line of credit allows auto repair shop owners to draw funds when needed up to an approved amount. Interest is only paid on the funds that are used and interest savings can occur through early repayment.
- Working capital loans—A working capital loan can provide funds for any operational expense, including staffing and payroll, bridging the gap between the time you receive payment and meeting your capital needs.
The Bottom Line
As the owner of a general auto repair shop, there’s no need for sleepless nights and constant stress if you feel like your business is in a cash crunch. While a bank loan may feel unattainable—especially if your credit is less than stellar or perhaps you haven’t been in business for too long—researching your options with alternative lenders may lead to you to the solution you’ve been seeking.
Clear Skies Capital has helped many auto repair shop owners determine the funding option that’s best for them and get the financing they need in a timely fashion. Contact us today at 800-230-9822 to discuss your company’s needs.