Looking for a way to finance your auto repair shop?
You need a lot of money to open up an auto repair shop. Since you’re going to work on vehicles, you need to have a large facility and dozens of pieces equipment and machinery.
Acquiring equipment and machinery can already deplete your available capital. But fortunately, you can get additional funds from machinery finance companies.
In this blog post, we’ll talk about starting an auto repair shop with the help of machinery finance companies. Also, I’ll tell you where you can get the best financing solution for your auto repair shop.
Guide to Starting an Auto Repair Shop
Finding a way to get additional funds for your auto repair shop isn’t the only thing that you should focus on. This is a simple problem because you can get funds from banks, colleagues, business partners, or machinery finance companies.
Keep in mind that you also need to know how you can successfully establish your auto repair shop. Getting the additional funds from the right financial partner is just a single factor.
Having said that, here’s a guide to starting an auto repair shop and how machinery finance companies can help you.
Take an ASE Certification Test
It’s not necessary to have ASE (Automotive Service Excellence) certification to work on cars. However, it’s still important for you to take an ASE certification test.
The ASE certificate will make it easier for you to obtain liability insurance and find financing for your new business. Having an ASE certification can also help you get more customers.
That’s because it’s proof of your skills. That makes people likelier to take a chance on engaging you for auto repair.
So if you have an opportunity to take the ASE certification test, take it. The benefits are well worth the minor exertion.
Just remember that to take the ASE certification test, you have to meet certain requirements. You need to have at least two years of work and educational experience combined, with at least one year obtained on the job.
Know the Startup Cost to Start an Auto Repair Shop
It's important for you to know the startup cost of an auto repair shop. Having knowledge about this can help you prepare the funds you need.
Without this, a lot of things can go wrong. There’s a big possibility that you might run out of funds before gaining your first customer, even!
Also, knowing the startup cost can help you determine if you need additional funds from the best machinery finance companies.
Usually, the startup cost includes the funds needed for renting a facility, acquiring equipment, and hiring employees. These common things you need for your auto shop can be easily predicted.
The total startup cost of the average auto repair shop is around $47,000. This includes equipment, insurance, and rent.
However, the cost can be changed if you choose to buy a facility or pay cash for equipment. So make sure to think about how you're going to finance your auto shop before you make a business plan. You may want to consider opening a big facility and trying to qualify for an SBA loan.
Make a Business Plan
Once you have an idea about the cost of the startup phase, that’s when you can make a business plan.
When making a business plan, think of the services that you can offer to your potential customers during your startup phase. The services that you offer should match your operational capacities and budget.
When doing this, consider getting advice from colleagues or any person with years of experience in managing an auto repair shop. They can help you make a realistic business plan that will reflect your skills and available capital.
Apart from that, make sure to list all the auto shop equipment involved in your operation. Address how you will acquire the necessary items or equipment for your operations.
The reason for this is that most automotive machines and auto repair equipment pieces are expensive. Acquiring all of them at once can deplete your capital quickly.
Also, include the machinery finance companies monthly payments in your business plan. It’s best to consider getting additional funds. Most start up auto repair shop owners are getting equipment financing loans to acquire the machinery they need to get going.
Getting Your Additional Funds
Getting additional funds from banks is an option. However, applying for loans from banks is a lengthy process. In addition to that, there’s no assurance you’re going to get loan approval. Most banks won't work with start up companies and if you're an existing business looking to get a second location be sure to show you have little debt, a high credit score, a positive debt service coverage history, and a profitable business for the past few years or you may not qualify.
Banks rarely approve loans for startups even if the owner has a good credit score. That’s why if you need additional funds, you should try getting it from machinery finance companies instead.
Auto repair shop owners often get additional funds from machinery finance companies. Unlike banks, machinery finance companies often have relatively fast application processes. They have lower requirements compare to banks and they give funds even to startup companies. The best auto repair equipment finance companies will approve auto shop businesses application only up to $75,000 to $150,000 with little hassle.
The Best Machinery Finance Companies
Getting additional funds from machinery finance companies will give you several benefits.
For one, most finance companies don’t just provide the necessary funds to their clients. Many of them also help those clients maximize the use of the borrowed money.
Of course, it’s still important to be picky in choosing a financial partner. Not all of them are willing to help their clients to that extent, so it’s better to look for reliable finance companies.
To help you find the best business financing partner, here’s a list of the most reliable equipment financing companies.
First American Equipment Finance
First American Equipment Finance is a finance company based in Fairport, New York. Their company is a subsidiary of City National Bank, which became part of the RBC in 2015.
They offer different types of financing to businesses in 50 states. However, the First American Equipment Finance mostly focuses on technology hardware and software solutions and infrastructure improvements.
Ascentium Capital is one of the most reliable machinery finance companies out there. Their company provides equipment and technology financing solutions. They’re known for providing good customer service to support their clients.
Moreover, Ascentium Capital offers direct financing options for small, mid-sized and Fortune 500 companies. They also offer equipment leasing to manufacturers, distributors, resellers, and franchise organizations.
Trust Capital is one of the most preferred machinery finance companies by business owners in the auto repair industry. Their company also offers financing solutions for different types of businesses.
But unlike many other auto repair equipment finance companies, they’ll approve your application up to $150,000 if you're a start up with over a 650 FICO score and over a 550 FICO score if you're over two years in business. If you're over three years in business and have over a 680 FICO score you can get up to $300,000 application only.
No matter your situation if you have a healthy business and positive cash flow Trust Capital will work hard to get you an approval for equipment leasing.
Trust Capital will give you all the information you need regarding your chosen financing program. They don’t charge hidden fees like most machinery finance companies do.
In addition to that, Trust Capital offers the best equipment financing rates for auto repair shops. They can give you affordable monthly payments for your machinery financing.
Also, they don’t just provide the necessary funds, they also help their clients use those funds in the way that’s best for their businesses.
Final Thoughts on Machinery Finance Companies
In this blog post, we talked about how machinery finance companies can help in establishing an auto repair shop.
You need a lot of money if you want to open an auto repair shop. Its startup phase can cost you at least $50,000. That amount includes fees for renting a facility, acquiring equipment, and hiring employees. However, that amount can still change, especially if you’re going to buy your location, hire great people and acquire lots of new auto repair equipment and machinery.
Most of the equipment and machinery you need for an auto repair shop is expensive. That’s the reason you need to seek help from the best machinery finance companies.
Unlike banks, machinery finance companies like Trust Capital can quickly provide the funds you need. They have lower requirements and tend to be faster at processing applications.
To know more about machinery finance companies, contact Trust Capital at (866) 458-4777.