The short answer: The business sells for about 2.7× SDE, a shop with $175K SDE prices near $472K, with any real estate valued on top. With an SBA 7(a) loan you put down roughly 10% of the total plus closing costs and working capital. Buying the building lowers your blended payment because it finances over a longer term. Budget a Phase I environmental review.
Purchase price by shop size
| Revenue | SDE (~13%) | Business @ 2.70× SDE | Profile |
|---|---|---|---|
| $600,000 | $78,000 | $210,600 | 2 to 3 bays, owner-operator |
| $1,200,000 | $156,000 | $421,200 | ~6 bays, avg. independent |
| $2,000,000 | $260,000 | $702,000 | 8+ bays, manager-run |
These value the business only. If the seller owns the real estate, it's appraised and added, often $300K, $1M+ depending on market, and financed over a longer SBA term. See current comps on the auto repair multiples page.
What moves the multiple
| Pushes multiple up | Pushes multiple down |
|---|---|
| ASE techs who stay post-close | Owner is the only skilled tech |
| Modern, well-maintained equipment | Aging lifts and diagnostics due for replacement |
| Loyal repeat + fleet customer base | One-time, price-shopping walk-ins |
| Owned/assignable prime location | Short lease, no renewal certainty |
| Clean environmental history | Contamination or open compliance issues |
Down payment & the full cost stack
- Equity injection, ~10% of total project cost (business + real estate); a standby seller note can count toward part.
- SBA + closing fees, guaranty fee, packaging, closing costs.
- Phase I environmental, when buying real estate, before close.
- Equipment reserve, budget for lifts, alignment racks, and scanners nearing end of life.
- Working capital, parts inventory and payroll between service and collection.
Real estate lowers the payment
Because SBA can amortize the building over up to 25 years while business assets run ~10, blending the two produces a lower annual payment than financing the business alone at a short term, which strengthens your DSCR.
A worked deal (with building)
You buy a $1.2M-revenue shop: business at 2.7× $156K SDE = $421K, plus $500K real estate, a $921K total project.
| Line | Amount |
|---|---|
| Business (2.7× $156K SDE) | $421,000 |
| Real estate (appraised) | $500,000 |
| Total project | $921,000 |
| Equity injection (~10%) | $92,100 |
| SBA 7(a) loan (~90%) | $828,900 |
| Est. annual debt service (blended ~18 yr, ~11%) | −$104,000 |
| Less: owner/manager wage reserve | −$70,000 |
| SDE available (rent normalized) | $156,000 |
| Cash flow after debt & wage | −$18,000* |
| DSCR (SDE ÷ debt service) | ~1.5× |
*The wage reserve is conservative, as the owner-operator you'd draw that $70K rather than hire it out, so real owner cash flow is positive and the ~1.5× DSCR clears lender minimums. The blended real-estate term is what keeps the payment affordable on a near-$1M project. Model your own version in the valuation calculator and read how SBA financing works.
Run this deal with your numbers
Price, real estate, down payment, loan payment, and cash flow, instantly.
Frequently asked questions
The business sells for about 2.7× SDE, a $175K-SDE shop prices near $472K, with any real estate on top. With an SBA loan you'd put down ~10% of the total plus closing costs and working capital.
SBA 7(a) generally requires ~10% equity on the total project (including real estate if bought). On a $472K business that's ~$47K, and a standby seller note can count toward part.
Yes, favorably. Real estate finances over a longer term than the business, so blending lowers the annual payment and improves coverage. It also secures a location central to the shop's value and builds equity.
SBA fees, legal and quality-of-earnings diligence, a Phase I environmental assessment when real estate is involved, equipment replacement reserves, and working capital for parts and payroll.
Sources
- Shop revenue, margins & multiples, WickedFile (2026); Peak Business Valuation.
- SBA 7(a) equity injection, real-estate terms & DSCR, sba.gov 7(a) program; SOP 50 10 8.
