Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

👨‍💼 Owner + Technician Labor Review

• Does the owner perform repair or painting labor?
• Are any family members working unpaid?
• Has labor been normalized for technician, estimator, and admin roles?
• Are wages aligned with local industry benchmarks?

🏷️ Insurance & DRP Dependency

• Are revenues tied to direct repair programs (DRPs)?
• Is there concentration risk with one or two insurers?
• Are written contracts or proof of recurring work available?
• Would revenue decline without the owner’s relationship with carriers?

📊 CapEx + Equipment Risk

• Are paint booths, frame machines, or lifts near end-of-life?
• Has CapEx been normalized in the free cash flow?
• Is depreciation a fair proxy or is CapEx deferred?
• Are any critical tools leased, outdated, or seller-retained?

📄 Revenue Quality + Margin Review

• Are parts, labor, and materials margin-separated?
• Are cost markups aligned with insurance or industry limits?
• Are labor hours appropriately booked and reimbursed?
• Are discounts, warranty claims, or write-downs properly reflected?

SBA SOP Tip

Shops dependent on DRPs or owner goodwill must reflect transferable value. Normalize labor, CapEx, and insurance risks to comply with FMV standards.