How much cash do I need to buy an auto repair shop?

Most buyers start with the price and stop there. A shop is a working business, though, and the day it changes hands the new owner has to keep the bays full, the technicians paid and the parts counter stocked. Build the cash plan from the closing statement outward, and ask your lender and accountant which items they expect you to cover from your own funds.

Parts and tire stock at closing

Inventory is often counted on the closing date and paid for on top of the base price. Ask how the count will be done, who does it and how slow-moving or obsolete parts are treated. A shelf of items nobody orders is not the same as fast-moving brake pads and filters, so agree in the purchase agreement how each kind is priced.

Working capital to carry the first months

Technician wages come due every pay period, while fleet and insurance accounts may pay later. Parts suppliers may also change the terms they offer a new owner. Set aside enough cash to cover that gap, and ask the seller for a typical month of payables and receivables so your estimate rests on the shop’s own pattern.

Equipment payments and the lease deposit

List every lift, alignment machine and scan tool, then ask which are owned and which are financed or leased. Payments on financed equipment may carry over to you. The landlord may also ask for a new deposit or a guarantee from the buyer. Raise both early so they sit in your budget rather than arriving at closing.

• The price and any holdback or seller note terms
• Inventory counted at closing
• Working capital for payroll and supplier accounts
• Equipment loan or lease payments you take on
• Lease deposit and professional fees