Most auto repair businesses require an infusion of funding from time to time to keep the operation running smoothly. A sufficient amount of cash is needed in order to restock inventory i.e. supplies, parts and equipment. These purchases are a must and necessary for maintaining exceptional customer service.
There are a lot of challenges for auto repair businesses and there are limited options available for credit with automotive supply and parts vendors, which can negatively impact a businesses bottom line. The best way around these challenges are to seek out a small business loan that is focused on auto repair business and services. These funds can provide what is needed to get you back on track quickly.
Top Five Auto Repair Business Business Loan Options
Similar to a car, your auto repair business involves the ideally suited solution in order to provide more proficiently. The best option is a small business loan which is much faster and doesn’t require excellent credit nor collateral.
Auto Repair Business Bank Loans
Most small business traditional bank loans, in particular lines of credit and term loans provide financing to business like auto repair shops with a recognized and highly-profitable business and also have excellent credit ratings. Through traditional financing, the rates of interest begins from 5%. The loan terms are typically 1-10 years. A traditional bank loan is considered to be one of the most recognized alternatives between the commercial funding choices which are available for the taking.
Unfortunately, some larger traditional banks only approve around 22% of small business loans requests. Alternatively, smaller traditional banks have an increased approval rate for small business loans as much as 50% when compared with bigger community banks. As a result, you must have strong financial records for approval with a traditional auto repair business loan.
Auto Repair SBA Business Loans
The SBA are known for having various funding options for small businesses. The small business administration lending options provide a promise from the federal government to protect an integral part of the lending providers losses in the event that the borrower defaults on the loan. Through protecting a significant portion of the lending companies deficits, a lender will have the ability to provide lending options to small businesses such as auto repair services that would not ordinarily be granted a traditional kind of business funding. The small business administration’s financing options also provide interest rates which begin at 6% and the loan repayment terms which range from 5-25 years.
Auto Repair Business Equipment Leasing
Equipment leasing is a great financing alternative for auto repair companies which cannot access the normal traditional funding through local banks to obtain either used or new equipment. However, equipment rentals for an auto repair business gives you the equipment needed and you won’t need to pay the total payment beforehand in order to receive the equipment. The rates begin at 5% and the terms for repayment are up to 5 years, so the business owner for the auto repair shop can rent the equipment with the choice to purchase the equipment once the lease term is complete.
Auto Repair Business Alternative Funding
Did you know that the rates for alternative business loans are nearly 9-20% yearly and the terms of repayment begin from 1-5 years. A middle prime alternate small business loan is an excellent solution for small businesses which cannot provide financial statements or credit in order to qualify for traditional bank funding. These alternative lending options have minimal credit prerequisites of just about 600+ when compared with a traditional bank, and fast financing verifications and approvals, often in only a day and financing in just a week, this kind of business financing is ideal for businesses searching for financing at rates which are affordable and fast.
Auto Repair Business Cash Advances
Merchant cash advance companies essentially do not provide funds for auto repair companies, but alternatively, they purchase future credit card sales or deposits in the bank in exchange for providing access to the small business cash advance. There are a few different features with the cash advance that might differ in terms of rates and repayment. Nevertheless the rates could be as little as 16% and as much as 100% through the terms of repayment of approximately 4-24 months.