Sterling, CO repair shops finance lifts, alignment machines and diagnostic scan tools with equipment financing, buy out an owner or a partner with a term loan, and carry parts and payroll with a line of credit or working capital. Each cost goes on the funding type whose schedule matches it.
Brookmark Financial in Sterling, Colorado explains how repair shops pay for equipment, buyouts, parts and payroll, and passes requests to funding partners who decide.
Diagnostic tools and lifts on an equipment loan
Two-post and four-post lifts, alignment machines, tire changers and balancers, scan tools with their software subscriptions, air compressors and paint booths are equipment, and equipment financing carries them with the equipment as security. Software subscriptions and calibration targets for driver-assistance systems sit at the edge: some partners include them in an equipment agreement, others ask the shop to pay them from cash.
Installed equipment, such as lifts bolted to the floor and paint booths, may need the landlord's agreement if the shop leases its building. Ask before signing the equipment order.
In 2023, the 19 auto repair and maintenance employers in Logan County, CO had 81 paid employees and $4.1 million in payroll (County Business Patterns).
Buying out an owner with a term loan
Buying out a retiring owner or a partner is a purchase of the business, and a term loan carries it. The price covers the equipment, the customer list, the name and the staff, and the buyer brings the seller's tax returns, the equipment list, the lease and the purchase agreement.
A partner may also ask whether the technicians are staying, since the shop's earnings depend on them, and whether the seller will stay on for a transition period. A seller who carries part of the price as a note can lower the amount the buyer finances.
If the building is part of the sale, it is commercial real estate, which banks and mortgage lenders finance separately from the business.
Parts inventory and payroll
Parts stock and payroll are short, repeat costs. A line of credit fits a shop that orders parts every week and pays its suppliers on account; working capital fits a known gap, such as payroll while a large fleet invoice is outstanding. Illustration only, invented figures: a $6,000 parts order held on a line for 45 days at an annual rate of 12% costs about $88.77 in simple interest (our arithmetic).
Automotive parts, accessories and tire stores counted 8 employer establishments in Logan County, CO in 2023 (County Business Patterns); a shop's own supplier terms are worth comparing with any outside financing.
What lenders review from a repair shop
- Business bank statements for recent months, showing card and check deposits.
- Two years of business tax returns, and personal returns for owners.
- Every lift, scanner or truck loan and lease the shop is still paying.
- The quote for the equipment or the purchase agreement for a buyout.
- The building lease, with its term and renewal options.
Fleet and insurance work changes the picture. A shop that bills fleets or insurers on 30-day terms carries those receivables before they turn into cash, and a partner may look at the receivables aging report alongside the bank statements. A shop paid mostly at the counter has a simpler story to tell.
A partner reading a repair shop request looks at how steady the deposits are, how much of the revenue comes from repeat customers or fleets, and how the new payment fits beside the existing ones.
A lift, a scan tool and a parts order: an illustrated shop budget
Illustration only, invented figures: a shop adds a $14,500 two-post lift and an $8,900 scan tool, $23,400 together (our sum). Financed at an annual rate of 10% over 48 months, the payment is about $593 a month and total payments about $28,487, of which about $5,087 is interest. A $6,000 parts order sits on a line of credit beside it, costing interest only while drawn.
Write down what the shop pays now in sublet work or turned-away jobs, then set the payment beside it. If the shop sends alignments out today, the alignment machine replaces that bill; if it waits on a single lift, a second lift adds hours it can sell. These are the owner's own numbers, and they carry more weight than any general rule.
The test is whether the new bay and the scan tool bring in more each month than the payment. A shop turning away work for lack of a lift can count the jobs it lost last month and price them.
Repair shop owners in Logan County, CO ask about funding
Shop owners ask whether used lifts can be financed (yes, when the value can be checked), whether a buyout can include working capital for the first months (some partners structure it that way), and whether a card-sales advance makes sense for a shop. A merchant cash advance is not a loan; it is collected from card sales and can cost much more than a line, so compare the totals first.
The industries hub has more on repair shops. The shop can send its figures through the request form.
By Brookmark Financial · Updated
