Auto repair shop funding, for more bays and better tools.

Where an auto repair shop's money comes from

A general repair shop and a collision center can look very different on paper:

• Retail customers pay by card at pickup. That's the steady daily stream on most shops' statements.
• Insurance payments drive collision work. Payment comes after the estimate, any supplements for hidden damage and the repair are approved, sometimes as a check made out to both the shop and the vehicle owner.
• Fleet accounts for local businesses, delivery services or municipalities are usually invoiced on net-30 terms.
• Warranty work is reimbursed by the manufacturer or extended-warranty company after a claim is submitted.

The more of your work comes from insurers, fleets and warranty companies, the more your revenue sits in receivables rather than in your account, and the more an underwriter will look at your A/R aging report alongside your statements.

Busy and slow seasons for repair shops

Tax refund season, roughly February through April, is when many customers finally approve the repairs they've been putting off. Winter brings dead batteries, tire changes, heater work and, in snowy regions, a wave of collision repairs. Summer means air conditioning and pre-road-trip maintenance. Late fall and the weeks around the holidays are often quieter, as customers spend elsewhere.

What shops spend the money on

• Diagnostic equipment. Scan tools and software subscriptions to keep up with newer models.
• ADAS calibration. Targets and equipment to recalibrate cameras and radar after windshield, alignment or collision work, which otherwise goes to a dealer or a mobile calibrator.
• Lifts and bays. Another lift, an alignment rack or a tire machine to take on more cars a day.
• Technicians. Experienced techs are hard to find; hiring one often means a signing bonus or tools. See payroll funding.
• Parts and tires. Stocking fast-moving parts or buying tires ahead of winter.

Matching payments to how your shop gets paid

For a mechanical shop paid mostly by card, a daily payment tracks daily revenue closely. A collision center waiting on insurance approvals and supplements can go days without a large deposit, and weekly payments, available in many cases, may sit better. Size the advance for your slower months, not tax refund season, and if a major fleet account or insurer relationship changes and revenue drops, ask for a reconciliation.

What an underwriter reviews for an auto repair business

• Your last three months of business bank statements plus month-to-date, and your most recent card processing statement
• Your A/R aging report, especially for insurance, fleet and warranty receivables
• Concentration: whether one fleet, insurer or referral program is a large share of your work
• Existing equipment leases and any advances already in place
• No more than 5 negative-balance days a month on average

Auto repair is not auto sales

InstaFunders does not fund auto sales, which means dealerships and businesses that make their money selling vehicles. Repair, service, collision, tire, transmission and glass shops are a different business and are eligible like any other. If your shop also sells vehicles as a meaningful part of its revenue, mention it up front so the underwriter can look at it properly. The full list of restricted industries is on the requirements page.

When an advance isn't the right tool for a shop

• A paint booth or frame machine. Big, long-life collision equipment is usually cheaper through equipment financing.
• Buying the building. Real estate belongs on a long-term bank or SBA loan.
• Replacing lost volume. If you've lost a key insurer or fleet relationship and don't have a plan to replace it, an advance only delays the shortfall.

Frequently asked questions