Auto Repair Shop Owners: 5 Tips to Get Your Loan Approved

Auto Repair Shop Owners: 5 Tips to Get Your Loan Approved
Your chances for loan approval often start long before you request a loan. You’ll see only one of
the following tips has to do with the actual loan application. All other factors must be attended to
regularly before you consider applying for a loan. With all 5 factors attended to, you’ll be in good
shape - wherever and whenever you apply for a loan.
1)
How well do you know your auto repair shop business?
Keep an accurate income statement that shows how much money comes in and how
much money goes out each year. Bank-type lenders will review 3 years of tax returns to
approve your loan. Some lenders may not care about how you report your income to the
government, but all lenders will care about how much money you have to repay the loan.
Records must be clear and accurate. Be prepared to show a lender as much financial
history as you can to convince them you can pay the loan back.
2)
What does your personal credit look like?
Business records are not the only records you must keep. Lenders WILL review your
personal credit, so make sure to keep your personal credit history clean as well. Now is
not the time to forget to pay your small credit card bill on time. If possible, make all of
your accounts current before applying for a loan. Obtain a copy of your credit report
before you apply and be prepared to discuss all aspects of your personal credit profile.
3)
Can you clearly identify and document why you are requesting the loan?
Lenders want to know how you will benefit from the loan. You must have a clear reason
for the request. Provide as much detail as you can regarding how much money you need
and why. Lenders also need to know how you will make money with their money. Here’s
an example:
My loan of $250,000 will help me as follows: I need:
v $50,000 to pay off various business debt
v $125,000 to pay off the existing mortgage on the property
v $30,000 to purchase inventory – dispatch supplies, seat covers, new
software & printer for vehicle inspections, etc.
v $20,000 to purchase new car lifts
v $25,000 to have as a surplus for any unexpected cash needs
The new equipment and inventory purchase should increase my profit by
$40,000 and the debt consolidation will save me $1,200 per month.
4)
Are there environmental issues on my property that need to be addressed?
Your property may present a relatively low environmental risk, but you must be in
compliance with any and all of your State regulations (including OSHA). Proper
containment, disposal & disclosure of VOC emissions, hazardous wastes and waste
water discharge must be maintained per the rules and regulations of the appropriate third
parties governing those areas.
5)
Is there a display of pride in ownership?
Keep your building well-maintained. A clean and well-kept business property makes a
good, trusting impression. A lender does not want to see trash in the car repair bays,
cracks in the concrete floors, broken windows or a façade in disrepair. Lenders may
easily assume if you’re careless with your property, you’ll be careless with the money
they loan you.
If you have any questions about these tips or would like to apply for an auto repair shop loan
through APEX Mortgage Corp., please call us at 1-800-262-2739 or apply online at
www.apexmtg.com.
Remember, APEX says, “Yes!” when your local bank says, “No.”