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SBA Express Loans for Car Dealerships
There are more than 16,000 franchised car dealerships and more than 20,000 independent dealerships across the U.S., generating nearly $1 trillion in annual revenue.
According to a 2016 report, there were more than 16,000 franchised car dealerships and more than 20,000 independent dealerships across the U.S., employing approximately 2 million people and generating nearly $1 trillion in annual revenue.
All this makes the car dealership industry an essential part of the American economy. So, if you’re interested in purchasing, expanding, or refinancing business debt on a car dealership, an SBA Express loan may be able to help.
Using SBA Express Loans for Auto Dealerships
SBA Express financing can be issued in amounts up to $500,000 and can be used for a wide variety of business purposes, including working capital, commercial real estate, and equipment, making it a fantastic option for auto dealers in need of quick funds.
Working capital financing: Whether it’s paying your staff or simply paying your light bills, keeping an auto dealership running is no easy feat. Fortunately, the SBA Express loan can help dealerships get the working capital they need to stay on track.
Purchasing inventory: Inventory is one of the largest expenses for car dealerships, and while $500,000 may not be able to get you many vehicles, it can provide a much needed financing boost, especially for smaller dealerships.
Business debt refinancing: If your car dealership currently has one or more business loans that are being offered to you on unreasonable terms, an SBA Express loan could be a smart way to refinance them.
What are the requirements for an SBA Express loan for car dealerships?
The requirements for an SBA Express loan for car dealerships are as follows:
- The loan must be used for business purposes, such as working capital, commercial real estate, and equipment.
- The loan amount must be up to $350,000.
For larger loans, car dealerships may want to consider the SBA 7(a) loan program, which offers loans of up to $5 million. Or, if you’re looking to purchase commercial real estate or finance the construction of a new dealership, you may want to go with an SBA 504 loan, which offers loans of up to $5.5 million and have incredibly low interest rates (currently sitting at around 5-6%).
What are the advantages of an SBA Express loan for car dealerships?
SBA Express loans can be a great option for car dealerships, as they offer up to $350,000 in financing and can be used for a variety of business purposes, including working capital, commercial real estate, and equipment. Advantages of an SBA Express loan for car dealerships include:
- Working capital financing: SBA Express loans can help dealerships get the working capital they need to stay on track.
- Purchasing inventory: SBA Express loans can provide a much needed financing boost, especially for smaller dealerships.
- Business debt refinancing: An SBA Express loan could be a smart way to refinance existing business loans with unreasonable terms.
What are the eligibility criteria for an SBA Express loan for car dealerships?
In order to be eligible for an SBA Express loan, car dealerships must meet the following criteria:
- Be a for-profit business
- Be located in the United States
- Have a tangible net worth of less than $15 million
- Have an average net income of less than $5 million after taxes for the past two years
For more information on eligibility criteria, please visit the SBA Express Eligibility page.
What are the repayment terms for an SBA Express loan for car dealerships?
The repayment terms for an SBA Express loan for car dealerships depend on the loan amount and the lender. Generally, the repayment terms are up to 10 years for working capital and up to 25 years for commercial real estate and equipment. For more information, you can visit the SBA Express Loan Terms page.
What documents are required to apply for an SBA Express loan for car dealerships?
In order to apply for an SBA Express loan for car dealerships, you will need to provide the following documents:
- Business tax returns for the past three years
- Personal tax returns for the past three years
- Business financial statements
- Personal financial statements
- Business license
- Business lease agreement
- Business debt schedule
- Business debt service schedule
- Business debt amortization schedule
- Business debt repayment plan
- Business debt collateral agreement
- Business debt collateral appraisal
- Business debt collateral lien agreement
- Business debt collateral lien release
- Business debt collateral lien satisfaction
- Business debt collateral lien subordination agreement
- Business debt collateral lien subordination release
- Business debt collateral lien subordination satisfaction
- Business debt collateral lien subordination waiver
- Business debt collateral lien subordination waiver release
- Business debt collateral lien subordination waiver satisfaction
- Business debt collateral lien subordination waiver subordination agreement
- Business debt collateral lien subordination waiver subordination release
- Business debt collateral lien subordination waiver subordination satisfaction
- Business debt collateral lien subordination waiver subordination waiver
- Business debt collateral lien subordination waiver subordination waiver release
- Business debt collateral lien subordination waiver subordination waiver satisfaction
- Business debt collateral lien subordination waiver subordination waiver subordination agreement
- Business debt collateral lien subordination waiver subordination waiver subordination release
- Business debt collateral lien subordination waiver subordination waiver subordination satisfaction
For more information on SBA Express loans for car dealerships, please visit https://sbaexpress.loans/blog/car-dealership-loans.
SBA 7(a) and SBA 504 Loans Can Also Be Great Options for Dealerships
SBA Express loans may be a great choice for some car dealerships, but, since they only offer up to $500,000 in financing, larger dealerships often need significantly larger loans. But don’t worry— the SBA has other options, like its flagship SBA 7(a) loan program, which offers loans of up to $5 million. Like SBA Express loans, 7(a) loans can be used for working capital, equipment, and commercial real estate.
Or, if you’re looking to purchase commercial real estate or finance the construction of a new dealership, you may want to go with an SBA 504 loan. These loans are offered in amounts up to $5.5 million, and have incredibly low interest rates (currently sitting at around 5-6%). However, this form of financing is limited to funding commercial real estate and heavy equipment, and cannot be used for working capital.