Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.
π¨βπΌ Labor + Compensation Adjustments
- Is owner/technician compensation normalized?
- Are family members or unpaid labor adjusted?
- Is payroll reflective of true staffing needs post-sale?
π CapEx and Equipment Review
- Are lifts, tools, and diagnostic equipment near end-of-life?
- Has a normalized CapEx figure been included in free cash flow?
- Is there evidence of deferred maintenance or repairs?
- Are major equipment items leased, owned, or missing from the balance sheet?
π Revenue Mix and Risk
- Is revenue reliant on one fleet or government contract?
- Are parts vs. labor margins broken out?
- Have any recent one-time contracts been normalized out?
π© Red Flags
- Addbacks for personal fuel, car washes, or family phone plans
- Old equipment but zero CapEx
- Revenue inflated during post-pandemic booms
π SBA SOP Tip
Cash flow must reflect labor replacement, recurring equipment investment, and realistic customer retentionβnot owner-dependent goodwill.
