Business Guides

3 Ways to Finance Auto Repair Shop

Last updated on December 19, 2019

Jacques Famy Jr

Do you want to get finance for your auto repair shop? Well, managing cash flows might be a challenge. If you are working with commercial accounts or you are being paid by the insurance companies, then cash flow may be an issue for you given the 30-60 days of wait. But, many repair shops can’t wait for the clients to pay as they may have immediate financial obligations like the salary of the employees, parts, machinery and other expenses. While you can try building a contingency fund to meet these ad-hoc demands, the best way would be to finance the repair shop. Here are a few ways you can get the needed finance:

Way-1: Build a Cash Reserve

A simple thing which you can try is building a cash reserve. You can use this reserve to pay for the repair shop expenses, make payment for the employees and pay for the auto parts as well. It is one of the most cost-effective options. However, building cash reserves takes time. You will have to set aside some profits and then save the funds in the reserve amount. A reserve may not be sufficient if your business is growing and that is when you may need financing.

Way-2: Invoice Factoring

You can improve the cash flow in your business with the help of an invoice factoring program. With it, you can finance the account receivable from your corporate and insurance customers. You will not have to wait for 30 to 60 days for payment as you will get funded against the invoices from AdvancePoint Capital. With the funds, you can buy parts, pay suppliers and cover payroll as well. The process is as follows:

If your business qualifies, you can secure the credit lines of up to USD 2.5M on the receivables which are due in 90 days. Working this way, you can even leverage the money which is  trapped in the unfulfilled invoices. The invoice factoring is done in a structured way, and your company sells its involvement in two installments.

  • 1st Installment-It is about 80% of the total value of the invoice and is transferred the very next day of the request.
  • 2nd Installment-It consists of the remaining percentage. When you pay the invoices in full, the rest of the amount is transferred after deducting the finance fee. You can use these funds the way you want.

The entire funding option is rather easy and painless. You will have to make a single-page application and then provide with the Accounts Receivable and the Accounts Payable reports.  You will not have to undergo a credit check, and even if you don’t have the best credit score, you can speak to our representatives.

Way-3: Line of Credit

They are used to provide the working capital loan to businesses in the short-term. A LoC works like a credit card. You simply pay interest on the amount that you take. If you qualify, you can get a flexible business line of credit of up to USD 100,000. You can repay the loan as and when you need it.  The term of repayment is 12 months.  You may need funds at anytime, and with a LoC, you can remain assured that you get the same as and when you need it.

How to Get Funds?

Call for a free Quote @ 1-800-381-8920

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.