This $3.5M Auto Repair / Mechanic Pays $271,705/Year After Debt
The numbers are mixed. Coverage falls short of the 2.0x Bulletproof threshold.
This is an auto repair / mechanic business listed at $3.5M, generating $2.4M in annual revenue and $806,284 in seller's discretionary earnings. At a 4.34x cash flow multiple, the asking price is above the 3.00x Bulletproof threshold and above the 2.80x benchmark for auto repair / mechanic businesses. The profit margin is 34%, well above the 22% benchmark for auto repair / mechanic businesses, about 1.5x the category figure.
We ran this deal through the DealScore Pro Bulletproof Calculator to see how it holds up across all five scoring criteria. Here is the full breakdown.
Deal Snapshot
The deal snapshot tells a mixed story. Revenue of $2.4M produces a 34% margin, well above the 22% benchmark for auto repair / mechanic businesses, about 1.5x the category figure. The 4.34x multiple is above the 3.00x Bulletproof threshold and above the 2.80x benchmark for auto repair / mechanic businesses.
Financing Overview
Using the standard 80/10/10 SBA deal structure (80% SBA 7(a) loan, 10% seller financing, 10% buyer down payment), here is what this acquisition looks like when financed.
Why the Numbers Matter
The headline number most buyers fixate on is the asking price. But the asking price alone tells you almost nothing about whether a deal is worth doing. What matters is what happens after you finance it.
The post-debt cash flow of $271,705 per year clears the $100K Bulletproof minimum, and that figure assumes revenue holds. On a $2.4M revenue base, it does not take much of a decline to move it. That is what the stress test below measures, and it is where this deal separates from the ones that clear. This figure is also calculated before any cost of replacing the owner’s own role in the business.
The DSCR of 1.51x means the business generates $1.51 for every $1 of annual debt payment. SBA lenders require a minimum of 1.25x. The Bulletproof standard requires 2.0x. This deal clears the bank minimum but falls short of the Bulletproof target, leaving you with a thinner safety margin.
The stress test is where many deals that look good on paper fall apart. We model a 20% drop in revenue and check whether the business can still cover all debt obligations. This deal fails. A 20% revenue decline would leave the business unable to cover its debt payments, which is a serious risk in a financed acquisition.
Industry Context
📈 How This Deal Compares to the Auto Repair / Mechanic Industry
Auto Repair / Mechanic defaults below the all-industry average, at 3.9% against 5.1%. Demand tends to be recurring and the skill requirements are well-defined, which is the profile lenders are most comfortable underwriting.
The deal has some solid fundamentals but the mixed signals mean lenders will scrutinize it more closely.
Strengths and Risks
✓ What Works
- Owner cash flow of $272k after every loan payment is made.
⚠ Watch Out For
- Coverage of 1.51 is above the bank floor but below where I want it. One slow quarter and the loan payment starts competing with payroll.
- At 4.34x the price is above the 3.22x top of the normal band. That is roughly $904k of extra purchase price financed over ten years, so it costs real money every month, not just at closing.
- Every figure here comes from the listing and none of it is verified. A listing is marketing, and it is written by someone paid on the sale.
Who This Deal Is For
Best fit for:
Experienced operators who can underwrite the specific risk flagged above and who have the capital to absorb a soft year without the loan payment becoming the problem.
This deal is not a fit for a first acquisition at the current asking price.
This one did not clear. Here is what does.
Most listings fail on the same few numbers. Starter members get the deals that pass, every week, with the source listing attached.
Frequently Asked Questions
Is $3.5M a fair price for an auto repair / mechanic business?
At 4.34x seller's discretionary earnings, this asking price is above the 3.00x Bulletproof threshold and above the 2.80x benchmark for auto repair / mechanic businesses. The Bulletproof threshold and the category benchmark are two different yardsticks, and this deal sits outside the stricter of the two.
What is a good profit margin for an auto repair / mechanic business?
The benchmark profit margin for auto repair / mechanic businesses is approximately 22%. This listing operates at a 34% margin, which is well above the 22% benchmark for auto repair / mechanic businesses, about 1.5x the category figure. That is a comparison against category medians, not a verdict on this listing.
Can I buy an auto repair / mechanic business with an SBA loan?
Yes. Auto Repair / Mechanic businesses are commonly financed through SBA 7(a) loans using an 80/10/10 structure: 80% SBA loan, 10% seller financing, and 10% buyer down payment. For this $3.5M deal the down payment is $350,000, but cash required at closing is $455,000 once closing costs and a working capital reserve of $445,917 are counted. SBA lenders require a minimum DSCR of 1.25x, but conservative buyers target 2.0x or higher. This deal's 1.51x DSCR clears the bank minimum but falls short of the conservative target.
How much do auto repair / mechanic business owners actually make?
Owner earnings vary widely based on revenue, pricing, and operational involvement. This auto repair / mechanic business generates $806,284 in seller's discretionary earnings (SDE) before debt service. After SBA financing under the 80/10/10 structure, the buyer would take home approximately $271,705 per year. That post-debt figure is the number that actually matters for a financed acquisition, because it reflects what ends up in your pocket after every loan payment is made.