Business Loans for Auto Shops

Business Loans for Auto Shops in Canada

Canada is home to a massive community of automotive shops that have been operating and helping Canadian citizens for years. As a leading country in the world, it is often a preferred location for auto shops to set up operations. In order to expand faster, many auto shop owners often apply towards an auto shop loan especially in the initial stages. This is where you can look towards Smarter Loans as we have you covered with our vast roster of auto shop loan providers in Canada. After assisting tons of auto shops during their initial phases, our providers are able to work out terms that benefit both parties. This is especially useful as all auto loans might have different use cases being that some garage owners would like to upgrade equipment, others would choose to undergo a new wave of staffing and so on. As a leading loan directory, we have one of the fastest application processes in the industry.

Our application services are entirely online so that you can choose when and where you can apply from. Now in minutes, you can enter an application form to one of our providers and in a matter of days, hear back on the results on that very application. To ensure your automotive garage is eligible for auto shop financing with one of our providers, guarantee that your shop that is at least 6 months old and makes over $5000 a month in revenue. To see which providers we work with, see the list below.

Click the “Apply Now” to begin applying to one of our providers. If you can’t pick a provider, pre-apply at Smarter Loans instead. We will assign a team member of ours to help you find an auto shop loan provider in Canada that suits your garage.

We can help connect you with the top auto shop business financing providers in Canada.

Get Auto Shop Business Loan Now!

Top Business Loans for Auto Shops Providers in Canada

Company

Amount

Interest Rate

Reviews

Terms

$5,000 - $300,000

Starting at 7.99%

4 - 18 Months

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$5,000 - $500,000

Varies

4 - 12 months

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$5,000 - $300,000

Starting at 7.99%

3 - 12 months

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$5,000 - $500k

Varies

6 -12 months

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$5,000 - $250,000

Varies

N/A

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$500 to $300,000

Starting at 8.39%

2, 3, 4, 6, 9, 12, 18 or 24 month terms

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$5000 - $800,000

Starting at 7.99%

6 - 24 Months

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$10,000 - $250,000

Varies

3 - 12 months

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$250 - $1,000,000

Starting at 10%

3 months - 60 months

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Best Types of Business Loans for Auto Repair Shops

Overall, auto repair shops can get a lot of value from Canada Small Business Financing Program (CSBFP) loans. That’s because CSBFP loans come with limits on their interest rates. The Government of Canada shares the risk with these lenders and sees to it that borrowers get reasonable rates.

Not every kind of business or purchase can be supported by the CSBFP. However, many purchases an auto shop would make can be financed. Particularly useful options include building and equipment purchases or improvements.

When it comes to the actual types of loans suited to auto shops, there are a few options.

Merchant Cash Advances

Merchant cash advances aren’t offered through the CSBFP, but they have a lot to offer auto shops. MCAs allow you to gain an upfront sum of cash in exchange for a portion of future credit card sales. They are typically granted very quickly and have low borrowing requirements. However, they usually cost more than the simpler types of loans.

Term Loans

Business term loans can be used for any business reason. A simple upfront sum of cash can be used to make a large purchase or several smaller ones. One popular reason to take out a term loan would be to pay off or consolidate other debts. When used properly, term loans are good for almost any regular financing need.

Term Loans

Revolving Line of Credit

A revolving line of credit is a very convenient long-term financing option. If your auto shop needs constant funding, a line of credit is likely the way to go. A revolving line of credit will usually come with a higher APR than a business term loan. However, they will also give you more flexibility.

Equipment Loans

Equipment loans are like term loans, but they allow you to use the equipment you purchase as collateral. This can help you avoid the more stringent collateral requirements that other loans may demand. Equipment loans may come with better rates as well.

How do you Apply for a Small Business Loan for an Auto Repair Shop?

The first step for any business loan will always be choosing your lender. You should choose your lender based on the kind of financing you need. Then, choose the lender that offers you the best deal you can find with your business experience and credit score.

Auto shop loans typically require:

· A credit report
· Applicable licensing
· Business financial statements
· Whatever documents a lender asks for

Auto Repair Store Loans FAQ

How long does it take to get a loan for an auto repair store?

This depends on where you get your loan. Banks will typically take anywhere from ten days to a couple of months to approve your loan. Online lenders are usually much faster, taking anywhere from one day to a couple of weeks.

Can I get a business loan for an auto repair shop with bad credit?

Yes, you can. There are business lenders that offer bad credit loans to any business borrowers with low credit scores. Then, there are other lenders who provide loans to business owners with a wide range of credit scores.

In any case, you can expect to be rejected by many lenders if you have bad credit. You can also expect worse terms and interest rates on any loans you take out. However, you will almost always have access to at least a few business loans.

How big of a business loan can I get for an auto shop?

CSBFP loans can grant you up to $1,000,000. You will find similar limits from many business lenders. However, the amount any lender will give you will depend on their assessment of your business. If your business is large and profitable, lenders will likely be more willing to offer you a larger loan. Alternative and online business lenders typically would lend no more than 500,000. The loan sizes are typically between 40,000 and 150,000.