If you own an auto repair business, you know that it can be a bit of a challenge sometimes to keep it running when you don’t have the funds available. After all, you need to make sure you have the cash to keep the right parts, supplies, and equipment so that you can provide stellar customer service to your clients.

Unfortunately, you are faced with a variety of challenges. Typically, the automotive parts/supply vendors have very few credit options and those that do have poor credit terms. Therefore, they are a bad option for your business’s bottom line. Often, what ends up happening is that you need to seek other financing options for your business needs.

In this article, we’ll explain to you 3 financing options for your auto repair business needs to help you on track for success.

Top 3 Financing Options for Your Auto Repair Business Needs

Just like your vehicle, your auto repair business needs the right product to ensure that it continues to run as it should. Ideally, you want a loan option that is quick and doesn’t require that you have stellar credit, doesn’t demand collateral and doesn’t put your business at risk if you have a slump in business.

The top 3 financing options for your auto repair business needs are:

  • Commercial Bank Loans
  • Business Line of Credit
  • Small Business Administration (SBA) Loans

How do they work?

Below, we’re going to take a closer look at each one of these to find out how they work:

Commercial Bank Loans

If you don’t have a good credit history or sufficient revenue to meet the requirements of a commercial bank loan, this may not be your best option. Typically, the criteria for a commercial bank loan is quite strict and include things like:

  • Detailed business plan
  • Excellent credit history/score
  • Business history
  • Valuable collateral

It’s important to note that the fixed payments that typically come with a loan of this type can hurt your business when you experience those fluctuations in business from season to season and even month to month.

The good thing about a commercial bank loan is that if you are approved, the interest rate is typically lower than other types of loans.

On the other hand, there are several disadvantages of a commercial bank loan. If you need money immediately, this is not the best option, as it can take up to 60 days to get the funds. The application process is quite lengthy and requires a lot of information about your business, as well as financial documentation. Typically, the bank requires some type of collateral, in case you default on the loan. Plus, if you’re just starting out, you may be turned down- most banks want at least 3 years of financial history.

Business Line of Credit

A business line of credit is a great option for your auto repair business needs. It’s a flexible option that is tailored to your needs. You are granted a sum of money that you can access and pay back as needed. Many alternative lenders who offer these typically have fast application approval and focus more on the potential of your business instead of your credit score.

There are several advantages to a business line of credit. First of all, this funding option is a lot like a credit card- but the interest rates are typically much lower. You can quickly access the funds, and often- depending on the lender- they are much easier to obtain. You don’t have to jump through as many hoops either, as the application process is much simpler.

There are also some disadvantages you’ll want to consider if you are considering a business line of credit. The interest may be good, but it won’t likely be as low as a bank would be.

Small Business Administration Loans (SBA)

The Small Business Administration, referred to as the SBA, is a government agency that will connect your application to a lending partner. Since the SBA backs your application with its own guarantee, you are more likely to be approved for the loan. There are several business loan options through the SBA, each with its own criteria.

There are some advantages to an SBA loan, such as the interest rates are typically low- depending on your credit and since the SBA is guaranteeing your loan, it may be easier to qualify for the funds.

There are also a few disadvantages as well, including the approval being dependent on your credit score, business history, and your business skills. Often, if you are approved, funding may take up to 90 days to clear- so it’s not a quick fix. The application process is extensive. You must include a detailed business plan, as well as a marketing plan for the future.


If you own an auto repair business, you know that funds can get tight from time to time and if you’re like most people, you may not have any extra cash stashed away for times like these. However, there are some options. The top 3 financing options for your auto repair business needs are commercial bank loans, business line of credit, or SBA loans.

If you want to move forward with applying for one of these options, contact Rexford Commercial Capital. Also, if none of these will work for you, we can help you find something that will.