Automotive Business Loan

It’s a known fact that small business owners have a hard time qualifying for business auto loans. The Small Business Administration created SBA loans to help small businesses secure additional working capital by guaranteeing 85% of the loan.

The SBA 7(a) loan is perfect for automotive businesses because of its competitive interest rates and 10 to 25-year repayment terms. A 7(a) loan is a general-purpose loan, which means you can use it for just about anything – as long as it’s for the benefit of your automotive business.

Invoice financing sells open invoices or accounts receivable to lenders or factoring companies at a discounted price. When your customers pay their dues, it goes directly to the lender. If you have open invoices and need additional working capital, you can use invoice factoring to gain access to quick cash when needed. Instead of waiting for customers to settle their invoices, you can sell them to access immediate funds, which you can use to cover operating expenses, purchase inventory, or invest in equipment.

More importantly, invoice financing doesn’t involve taking on debt because it uses invoices you already have to get cash. This is helpful for auto repair shops, where cash flow can fluctuate due to the nature of the business and customer payment timing. In short, invoice financing is a handy way for auto repair shops to keep money flowing and get the cash they need without waiting.

A business line of credit is a flexible financial tool that provides your auto repair shop with access to funds up to a predetermined limit, similar to a credit card. You only pay interest on the money you use, and once you pay it back, the cash becomes available again whenever you need it.

This setup is beneficial for auto repair shops because it provides a safety net for unexpected expenses or fluctuations in cash flow. Whether you need to buy inventory, cover payroll during slow seasons, or handle sudden repairs, you can dip into your line of credit without applying for a new business auto loan each time.

Personal credit, cash flow, and business credit are the basis for the terms of your line credit. Since collateral is not required, lenders look for candidates with solid cash flow and operating history. If you have an excellent credit history, as well as cash flow, the terms of your loan will most likely be attractive.

A business term loan offers your auto repair shop a straightforward solution for accessing a lump sum of money. Typically repaid over a set period, often with a fixed interest rate, these auto loans can span from a few months to several years, depending on your agreement with the lender.

Getting a business auto loan empowers your auto repair shop to pursue growth opportunities, enhance operations, and better serve your customers. You can assist in purchasing or upgrading specialized equipment, facilitating expansion or renovation projects, investing in marketing and advertising, and managing cash flow. With clear repayment terms and access to necessary funds, a business term loan is a valuable resource for maintaining financial stability.

Equipment financing is a simple way for your auto repair business to get the necessary tools and machinery without paying for everything upfront. Instead of paying for the equipment in full, you can finance the purchase over time through a loan or lease. This means you make smaller, manageable monthly payment terms, which is easier on your budget and cash flow.

Equipment financing can be a lifesaver for auto repair shops. It lets you keep your shop stocked with the latest equipment, like lifts, commercial vehicles, and diagnostic tools, without draining your savings or maxing out your credit cards. By investing in quality equipment through financing, your auto repair shop can work more efficiently, minimize downtime, and generate more annual revenue in the long run.

An asset-based loan lets your auto repair business apply for funding using its assets, like inventory or equipment, as collateral. Instead of focusing on your credit score or financial statements, asset-based financing looks at the value of your assets. This means you can borrow money based on the worth of your assets, which is helpful if you don’t have a perfect personal or business credit score.

Asset-based financing often comes with flexible terms and competitive rates, making it a practical choice for businesses looking to grow or overcome financial hurdles. By leveraging the value of your assets, you can get the funding you need to expand your shop, invest in marketing, or cover unexpected expenses.