How an automobile enthusiast is using working capital financing for auto auto repair shops to grow his business.
David is an automotive enthusiast first and foremost, followed by a small business owner. His passion since the second grade has been all things Porsche.
David graduated from one of the best universities for architecture in the United States. To pay for his college degree, he resorted to repairing and rebuilding Porsches on weekends and during over the summer.
David learned how to work on them when he bought his first Porsche, a wrecked 914 when he was 15 years old. By the time David turned 17, he had managed to scrap enough money together to buy an early 1970s ‘basket case’ Porsche 911T. It was on this car that he learned how to work on Porsches.
A change in careers
Upon graduation with a degree in architecture, David was able to get an entry-level architecture job at a small firm. After a few months, he found himself drawn to working on cars in the evening and on weekends after work. When David realized it was working on cars that he thought of most, he realized it was time for a career change.
A new beginning
Within 6 months, David had quit his job at the architectural firm and set up a small garage to work on cars. Since David had graduated from college within the past two years, he did not have any savings to speak of that he could use to fund his new business. As a result, he knew it was going to be a rough road.
In the early days of David’s Porsche repair shop, there was never a shortage of work. Because of his network of friends, he always had a car in his shop to work on. As a result, David was always able to cover his bills and even managed to put some away in savings.
The steady stream of Porsche owners needing their expensive cars fixed was definitely a good thing. The cost of the specialized equipment to fix these precision cars, not so much. German engineering is going to cost money. It doesn’t matter whether it is sports cars or tools.
Fortunately, David had been saving money as best he could since he first his business. He had accumulated enough money to buy about 70% of the equipment that he needed to upgrade his operation.
Once David bought the tools he needed, it didn’t take long to realize that there were some things he failed to consider. He assumed the tools and equipment he bought would enable him to work much quicker, hence increasing the profitability of each project. He failed to consider that the new equipment would enable him up to work on many of the newer model Porsches.
More work than he could handle
As word got around, David was getting more work than he could handle. It was time to think about expanding the operation. He already had most of the equipment he needed to add another service bay. The next step was finding a new location with more room to work on cars.
Upon doing the math, David realized that the additional expense of growth would put him in a tight spot for a few months. He also realized that with a marketing program and the remaining equipment he needed, he could substantially increase his cash flow.
Alternative funding sources
As a business less than three years old, David did not quite have the financial or credit history that attracted the banks. As a result, he had to look for other sources of capital other than a bank financing.
Enter Zip Capital Group with working capital financing for auto repair shops
One of his clients, Mark was a small business owner and Zip Capital Group client. David and Mark were talking one day about next steps and Tom suggested that he give Jason, his representative at Zip Capital Group a call.
Once David and Jason spoke, an application for a working capital financing was completed that same day. David was able to show stable cash flow so there was never any concern he would not be approved. The next day, David was approved and once he accepted the terms, the money he was seeking was wired to his account within 48 hours.
Since we have started working with David, he has been able to realize all of his financial goals for his business. A small online marketing campaign was able to drive in new business almost immediately generated the cash needed to cover his increased overhead.
David is very happy with the way things have progressed and Jason, his representative at Zip Capital Group has become a trusted advisor helping him maximize his opportunities.
Zip Capital Group counts many auto repair shops as valued customers. We welcome the opportunity to discuss how a working capital financing may meet your finance needs. We provide working capital financing for auto repair shops.