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

👨‍💼 Labor + Compensation Adjustments

• Is owner/technician compensation normalized?
• Are family members or unpaid labor adjusted?
• Is payroll reflective of true staffing needs post-sale?

📊 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?

📄 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?

🚩 Red Flags

• Addbacks for personal fuel, car washes, or family phone plans
• Old equipment but zero CapEx
• Revenue inflated during post-pandemic booms

📌 SBA SOP Tip

Cash flow must reflect labor replacement, recurring equipment investment, and realistic customer retention—not owner-dependent goodwill.