Buying a Big O Tires franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 38 7(a) loans to buy an existing Big O Tires (classified mostly as Tire Dealers), totaling $53.1M. The median loan was $1,091,500, 69% higher than the $645,250 median for all SBA-financed acquisitions. 5 of these loans were approved in the last two fiscal years.
Terms signed in the LOI shape the purchase agreement that follows.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Big O Tires resale loans landed between $732,500 and $1,626,750.
- Lender experience exists. Live Oak Banking Company alone has financed 17 Big O Tires resales.
- Guaranty. The SBA guaranteed 79% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Big O Tires resale
The median SBA 7(a) loan for a Big O Tires resale was $1,091,500 across 38 loans (FY2018 to FY2026). Live Oak Banking Company, Exchange Bank and United Business Bank have financed the most Big O Tires resales. Of 28 seasoned loans (FY2018 to FY2021), 3.6% were charged off, in line with the 3.5% average for all SBA acquisition loans.
Big O Tires acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 3 | $4M | $1,280,000 | |
| FY2019 | 5 | $5.9M | $1,204,000 | |
| FY2020 | 8 | $14.9M | $854,400 | |
| FY2021 | 12 | $14.2M | $870,550 | |
| FY2022 | 3 | $4.4M | $1,095,000 | |
| FY2023 | 2 | $1.4M | $694,000 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 2 | $3.9M | $1,937,500 | |
| FY2026 | 3 | $4.5M | $1,095,200 |
How often do these acquisition loans fail?
Of the 28 Big O Tires acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 1 have been charged off by the SBA, a rate of 3.6% by loan count and 0.5% by dollars. 11 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Big O Tires is in line with the acquisition-loan average. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Terms signed in the LOI shape the purchase agreement that follows.
Request Engagement AssessmentAlex Lubyansky leads every engagement.
Lenders financing Big O Tires resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 17 | 44.7% | $28.1M | |
| 2 | Exchange Bank | 4 | 10.5% | $3.4M | |
| 3 | United Business Bank | 3 | 7.9% | $5.1M | |
| 4 | Citizens Bank | 2 | 5.3% | $5.3M | |
| 5 | Bank of Utah | 2 | 5.3% | $2.1M | |
| 6 | Happen Bank | 1 | 2.6% | $1.6M | |
| 7 | Zions Bancorporation, National Association | 1 | 2.6% | $1.5M | |
| 8 | The New Washington State Bank | 1 | 2.6% | $1.2M | |
| 9 | Midwest Regional Bank | 1 | 2.6% | $981K | |
| 10 | Old National Bank | 1 | 2.6% | $839K |
States where Big O Tires units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 11 | 28.9% | $10.3M | |
| 2 | Utah | 8 | 21.1% | $13.6M | |
| 3 | Indiana | 4 | 10.5% | $7.3M | |
| 4 | Nevada | 3 | 7.9% | $4.6M | |
| 5 | New Mexico | 3 | 7.9% | $3.3M | |
| 6 | Idaho | 3 | 7.9% | $2.4M | |
| 7 | Colorado | 3 | 7.9% | $2.3M | |
| 8 | Nebraska | 1 | 2.6% | $4.8M | |
| 9 | Washington | 1 | 2.6% | $2.6M | |
| 10 | Arizona | 1 | 2.6% | $1.9M |
Terms signed in the LOI shape the purchase agreement that follows.
Request Engagement AssessmentFree consultation. All 50 states.
How lenders classify Big O Tires
Lenders code each loan to a NAICS industry. For Big O Tires the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Tire Dealers | 29 | 76.3% | $45.2M | |
| 2 | General Automotive Repair | 4 | 10.5% | $4.1M | |
| 3 | All Other Automotive Repair and Maintenance | 2 | 5.3% | $2.2M | |
| 4 | Automotive Parts and Accessories Stores | 2 | 5.3% | $1.2M | |
| 5 | All Other Miscellaneous Retailers | 1 | 2.6% | $536K |
Questions buyers ask
How much do buyers borrow to buy a Big O Tires franchise?
The median SBA 7(a) loan for a Big O Tires resale was $1,091,500 across 38 loans (FY2018 to FY2026). The middle half of loans ran from $732,500 to $1,626,750. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Big O Tires acquisitions?
Live Oak Banking Company has made the most SBA acquisition loans for Big O Tires (17, 45% of the total). Exchange Bank, United Business Bank, Citizens Bank follow.
What interest rate and term do Big O Tires acquisition loans carry?
The average initial rate at approval was 6.34% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Big O Tires resale riskier than other SBA-financed acquisitions?
In the seasoned cohort (FY2018 to FY2021), 3.6% charged off, in line with the 3.5% average for all SBA acquisition loans.
Where are Big O Tires units being bought with SBA loans?
California (11), Utah (8), Indiana (4), Nevada (3), New Mexico (3). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
Seller note standby terms and third-party consents are reviewed before closing.
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Related
- All Tire Dealers acquisitions
- California acquisitions
- Utah acquisitions
- Indiana acquisitions
- Live Oak Banking Company
- Exchange Bank
- United Business Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Big O Tires - Business Format Franchise / Product Distribution Franchise" (franchise code S0216). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.