Buying a Carstar franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 10 7(a) loans to buy an existing Carstar (classified mostly as Automotive Body, Paint, and Interior Repair and Maintenance), totaling $9.5M. The median loan was $586,850, 9% lower than the $645,250 median for all SBA-financed acquisitions.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Carstar resale loans landed between $478,600 and $1,575,500.
- Lender experience exists. First Commonwealth Bank alone has financed 3 Carstar 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 Carstar resale
The median SBA 7(a) loan for a Carstar resale was $586,850 across 10 loans (FY2018 to FY2026). First Commonwealth Bank, Happen Bank and First Merchants Bank have financed the most Carstar resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
Carstar acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 3 | $4.8M | $1,893,000 | |
| FY2019 | 0 | $0 | - | |
| FY2020 | 2 | $1.5M | $766,850 | |
| FY2021 | 4 | $2.8M | $495,750 | |
| FY2022 | 1 | $416K | $416,000 | |
| FY2023 | 0 | $0 | - | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 0 | $0 | - | |
| FY2026 | 0 | $0 | - |
How often do these acquisition loans fail?
Fewer than 20 Carstar acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. 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.
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Lenders financing Carstar resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | First Commonwealth Bank | 3 | 30.0% | $991K | |
| 2 | Happen Bank | 1 | 10.0% | $2.4M | |
| 3 | First Merchants Bank | 1 | 10.0% | $1.9M | |
| 4 | St. Louis Bank | 1 | 10.0% | $1.8M | |
| 5 | Live Oak Banking Company | 1 | 10.0% | $860K | |
| 6 | PlainsCapital Bank | 1 | 10.0% | $674K | |
| 7 | The Huntington National Bank | 1 | 10.0% | $500K | |
| 8 | Busey Bank | 1 | 10.0% | $416K |
States where Carstar units are bought
That draft favors the seller. We review it for the buyer, line by line.
Submit Transaction DetailsFree consultation. All 50 states.
How lenders classify Carstar
Lenders code each loan to a NAICS industry. For Carstar the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Automotive Body, Paint, and Interior Repair and Maintenance | 8 | 80.0% | $8M | |
| 2 | General Automotive Repair | 2 | 20.0% | $1.5M |
Questions buyers ask
How much do buyers borrow to buy a Carstar franchise?
The median SBA 7(a) loan for a Carstar resale was $586,850 across 10 loans (FY2018 to FY2026). The middle half of loans ran from $478,600 to $1,575,500. 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 Carstar acquisitions?
First Commonwealth Bank has made the most SBA acquisition loans for Carstar (3, 30% of the total). Happen Bank, First Merchants Bank, St. Louis Bank follow.
What interest rate and term do Carstar acquisition loans carry?
The average initial rate at approval was 6.12% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 12.8 years.
Is a Carstar resale riskier than other SBA-financed acquisitions?
Too few Carstar acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are Carstar units being bought with SBA loans?
Ohio (3), Arizona (1), Illinois (1), Virginia (1), Texas (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Automotive Body, Paint, and Interior Repair and Maintenance acquisitions
- Ohio acquisitions
- Arizona acquisitions
- Illinois acquisitions
- First Commonwealth Bank
- Happen Bank
- First Merchants Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Carstar" (franchise code S2138). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.