Midwest Auto Body Shop

The Opportunity

Business was booming for Jose and his auto body shop — but the lack of a proper parking lot was killing his ability to keep up with demand. Half of the 5,000 sq. ft shop he was renting was used to store cars, the other half for fixing them. Jose knew that to keep up with growth he had to get a bigger building.  

He found a property for sale with a 6,000 sq. ft workspace, plus 5,000 sq. ft in parking equating to about 20 parking spaces. On top of that, the mortgage payment would be half of what he was paying in rent. The property was listed for $350,000.  

The Challenge

Jose initially approached a loan officer at another SBA lender for a commercial real estate loan. However, the minimum loan amount the lender would finance for commercial real estate was $650,000. Because this would be his first business loan, Jose was wary of taking on that much debt.  

Even though the other lender and Celtic Bank are competitors, the loan officer put rivalry aside to recommend Jose to us. And once Jose contacted his loan officer at Celtic Bank, everything started to fall in place. Within 60 days of starting an application, Jose was in his new building.  

Celtic was able to extend 90% financing due to the borrower’s strong industry experience and the post-closing liquidity from the loan payment being less than the rent on the old property.  

The Solution

As soon as Jose moved into his new building, he was able to immediately hire two new techs and start hacking away at over a month’s worth of backlogged jobs.   

And while no one planned for COVID-19 in March 2020, that increased cash flow from the lower mortgage payment proved to be the difference between life and death for Jose’s business. Before the pandemic there were five other auto body shops in the area but by 2022, three of those shops had closed.  

As a result of the reduced competition and the return of “business as usual,” business is once again booming at Midwest Auto Repair.