Keeping a car repair business running effortlessly from time to time requires for more funding than you have available. Your business nature requires you to have adequate cash to stock the right parts, supplies and equipment, which are important in offering exceptional, well-timed service on your customers.
As a business owner you know that your auto repair business is filled with challenges. The automotive parts and supply vendors you deal with typically have very limited credit options, with inappropriate terms, which end up being a bad option for your business and its bottom line. Frequently, what you must look for is small business loan for auto repair business. This can offer the funding you actually need to get back on the quick track on the road to success.
Top Five Business Loan Options for Auto Repair Business
Just like an automobile, your auto repair business requires just the right product to make it run efficiently. Your perfect solution is a small business loan that is quick and does not require collateral, excellent credit, or put your business success at risk if you experience a momentary decline in business.
Bank Loans for Auto Repair Business
Bank loans, especially term loans and business lines of credit offer funding to business such as auto repair with established profitable business and have exceptional credit score. With traditional type of funding, the interest rates start from 5% and the terms between 1-10 years. A traditional loan from bank is the most preferred option among all commercial financing options available.
Regrettably, large banks have only 22% of approval rate for small business loans. On the other hand, small banks have a higher small business loan approval rate of 50% as compared to large banks. Therefore, you need to have solid financials in order to get approved for a traditional type of business loan for your auto repair business.
SBA Loans for Auto Repair Business
Small Business Administration (SBA) have lots of funding programs for small businesses. SBA loans program offer guarantees from the government to cover a part of the lender’s losses if a borrower default on SBA loan. By covering a major part of the lender’s losses, the lenders are able to offer loans to businesses like auto repair shops who wouldn’t normally be approved for traditional type of business financing. SBA funding programs have rates that is starting from 6% with loan repayment terms ranging from 5-25 years.
Equipment Leasing for Auto Repair Business
Equipment leasing is an excellent funding program for auto repair businesses that can’t acquire traditional financing from a bank to acquire new or used equipment. Leasing equipment for auto repair business allows you to get the equipment you need without having to pay the full payment in advance for the equipment. With rates starting from 5% and repayment terms as much as five years, an auto repair business owner is able to lease the equipment with the option to buy the equipment at end of lease term.
Alternative Financing For Auto Repair Business
Alternative loans have affordable rats, which area almost 9-20% annually and the repayment terms starting from 1-5 years. A mid prime alternative small business loan is a good option for business owners that lack the credit or financial statements to get traditional bank financing. Alternative loans come at lower credit requirements almost 600+ as compared to banks, quick funding approvals, usually in just 24 hours — and funding within week, this type of business funding is perfect for businesses looking for quick funding and affordable rates.
Cash Advances for Auto Repair Business
Merchant cash advance firms basically don’t a lend cash to auto repair businesses; however as an alternative, buy future credit card and/or bank deposits in return for offering the small business with a cash advance.
Features of different cash advance loans can vary in repayment terms and rates. However the rates can be low almost 16% and high as 100% with repayment terms between 4-24 months.