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Case Study: Auto Sales/Auto Body Shop, Southwest Region

Commercial Mortgage
Posted on 
July 24, 2023


Transformational. That’s the best word to describe what one local business did in the Southwest. An enterprising woman business owner was able to take a gas station property and transform it into a high-end pre-owned car dealership and repair shop.

The business, founded in 2017, had prospered and grown, but the owner needed to refinance the original hard money loan to recoup the money they used to purchase and renovate the property. Financially, the business owner was challenged by the terms of the original loan and needed help finding an acceptable refinancing option.


The client’s goal was to refinance their current loan, improve their terms, and possibly lower their rate. They also hoped to cash out additional funds for repairs and renovations to the property.

The borrower went through all the proper due diligence and steps you can take to turn a gas station into a used car sales and auto repair facility, but they were not given a No Further Action (NFA) letter from the city where their business operates.

Across the board, auto-related properties often have difficulty securing funding, and because there was also an auto repair aspect to the proposal, that made it even more problematic for many lenders who might have otherwise considered funding the loan.


Lower Rate $500,000 Refinance and Cash Out

The No Further Action letter was the most significant challenge this borrower faced. But since Apex Commercial Capital has an environmental expert on staff who could review and approve the loan, that issue was quickly resolved. Having an internal expert with the knowledge and understanding of what our environmental insurance partner is looking for gives us an advantage over most lenders.

 Apex Commercial Capital provided a $500,000 loan that allowed the client to refinance their hard money loan and cash out a portion for the renovations and repairs needed to finish turning the property into a high-end auto sales facility and auto repair center. The loan also allowed them to invest a portion of the cash out back into the business.

In general, Apex Commercial Capital is more flexible than other lenders – in this instance, looking beyond just the initial criteria and documentation provided. Instead, Apex Commercial Capital worked with the client and determined what additional information they needed to provide to get the loan approved. There was agreement that this was truly a good deal and a great location that could benefit both the lender and the borrower. In the end, Apex Commercial Capital could even offer the client a better rate.


The refinance from Apex Commercial Capital provided the client with the funds they needed – taking away the stress of having a hard money loan, allowing the owners to be at ease and focus on running their business. In addition, Apex Commercial Capital gave them the capital to put back into the business for expansion and growth. And, ultimately, giving them a good option if they decide to expand again – perhaps opening a second location.

Now, the client’s loan is not just interest only, they are paying off the principal balance. They have a lower monthly payment and rate – and with that lower payment overall, they’re helping their bottom line. Secondly, now, they have the funds to invest in more used vehicles, and more marketing for the auto repair business, which will increase revenue even more.


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