Low Competition General Auto Service with Specialty.

8 Lifts. Gated Lot. Inventory Included. SBA Lender Pre-Approved.

2814301

Specifications

 Price:
$175,000
Revenue:
$1,112,991
2022 Adj. Cash Flow:
$202,840
Location:
Santa Clara County
Service Area:
South Bay Area
 Adjusted Profit Margin:
18.22%
 Employees:
2 FT Techs, 1 FT Writer
Seller is 3rd tech
Reason for Sale:
The Seller
is Retiring
Goodwill: 36 Yr. Reputation, 4.7 Star Google reviews
Year Established:  1987
Services:  Auto & Truck general Repair – Including foreign and domestic brands. No Tire Sales. Specializes in Transmission rebuilds.
Furniture, Fixtures
& Equipment: 
8 lifts (2 Heavy Duty), Overhead oil pump system, new AC machine, separate transmission build area with press and parts cleaner, full office and reception area, gated parking lot.
Services:  70% transmission (of that 90% rebuild and 10% box) 30% comprises of breaks, electrical and AC
Clients:  90% Retail; 10% Fleet. Repairs per week, 20-25
Facility & Lease:  5000 sq. ft. Shop, seller owns building, pays himself fair market rent at $1.63psf, will write favorable terms for qualified buyer
Personnel:  2 FT Technicians, 1 FT Owner/transmission builder and 1 FT Service writer
Software Used:  All-Data, web site can be added
SBA Approval:  SBA Lender has approved this business for a *qualified buyer

Value Proposition

  • 38 years of established reputation
  • Exceptional customer reviews of 4.7 stars
  • < 15% Profit margin, $202,000 adjusted earnings 2022
  • Price includes inventory valued at $70,000
  • Hourly rate currently charged 20% below market rates
  • 2022 sales recovered better than 2019 sales
  • Experienced team of technicians and writer
  • Market projection sees increased demand as customers keep their cars longer
  • Located with other repair shops making synergy
SB829 Profit Margin Chart 20023 05 25

Revenue Breakdown

SB829 Revenue By Service Chart 20023 05 25
SB829 Cost By Class Chart 20023 05 25

Financial Highlights

  • Listing Price: $175,000 including Inventory
  • Price adjusted down to cover cost of employee
  • 2022 Cashflow (SDE): $202,840
  • 2022 Average repairs per week 20 to 25
  • 2022 Average R/O $933
  • Parts cost listed in Operating Expenses
  • 2022 Parts Expense was $619,246
  • Inventory value estimated at $70,000
  • Recommended working capital $50,000
  • All equipment necessary to operate included in the sale
SB829 Sales Cash Flow Chart 20023 05 25

Cashflow Analysis

SB829 Financial Table 2023 05 25

Asking Price

The asking price is determined using a cash flow methodology. Cash flow is the sum of net income from the business plus any non-cash expenses, non-recurring items and any seller’s personal expenses. A multi-factor multiplier is applied to the cash flow based on the condition of the business.

For this business, 2022 cash flow is applied making the business price more favorable to the buyer. The multiplier applied in this case is 2x, including inventory valued at over $70,000.

Untitled design 24

SBA Qualified Buyer

Qualified buyer will have 680 FICO score or better, an existing business or an individual buyer with a second income in the household and have an additional $50 to $55,000 additional cash post sale for fees, escrow and security deposits. Bank offers three options; 10.5% quarterly variable, 11% 5 year fixed, variable after, and 11.5% fixed, each based on 10-year amortization. SMA currently is waiving the Guarantee Fee.

Funding Example

Purchase Price: $175,000

20% Buyer Down Payment / Borrower Injection

$35,000

Buyer’s Equity

90% Bank Loan

$140,000

10-Year term at a rate of 11.5% Fixed = Monthly loan payment of $1,968.34 including estimated closing costs

  • Cash Flow (SDE in 2022): $202,840 adjusted for tech $147,840
  • Annual Payment to Bank: $23,620
  • Net Profit (After Expenses and loan payment): SDE $179,220 or with tech adjustment $124,220
  • SBA made their calculations and pre-approval based on 3-year average ($165,573) which is lower than 2022 SDE of $202,840
Untitled design 25

* Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.