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Christian Brothers Automotive Franchisees Find Investment Help with SBA Loans
Christian Brothers Automotive Franchisees Find Investment Help with SBA Loans

The automotive-care franchise’s perfect record of repayment has earned generous financing options from the Small Business Administration

When opening a franchise operation, many entrepreneurs seek to mitigate the upfront expenses through loans. Among the safest loan options available for franchise owners are those offered by the Small Business Administration, which are guaranteed up to 90 percent by the federal government. Because that high guarantee poses a substantial risk for the SBA, the agency is famously selective in their awarding process. Few franchise brands see SBA loans awarded to their franchisees as a matter of course. Thanks to their perfect track record of repayments, Christian Brother Automotive is one of those few brands.

In the 35 years since the first Christian Brothers Automotive store opened, the brand has not closed a single location, and they are one of only a handful of franchise brands that have never had a franchisee default on a loan. That track record has made Christian Brothers franchisees a rare safe bet in the eyes of the SBA, who regularly award loans to new and existing CBA franchisees to open new stores.

At $458,950 to $555,350, startup costs for a Christian Brothers Automotive store are already among the most modest in the industry. With most SBA loans covering 82–83 percent of startup costs, most franchisees are able to open a new CBA store with an out-of-pocket investment of $85,000, far below hundreds of thousands typically required to open any new business.

Josh Wall, Christian Brothers’ vice president of franchise and strategic development, said that the franchise’s low startup costs are meant to attract talented owners whose only prohibitive obstacle to ownership is a high investment.

“We are very selective about who we bring on board. We are looking for good stewards of the brand, people who can live up to our core values and run a strong business. Those are the qualifications that matter to us, not liquidity,” Wall said. “It doesn’t serve us to rule out good candidates just because they can’t come up with an enormous initial investment.”

By vetting candidates based on character and capability rather than financial assets, Christian Brothers has built a strong network of franchisees and made their brand one of the most reliable in the industry from a consumer perspective. That consumer trust has proven invaluable in an industry that is still dogged by a reputation for being less than honest, and CBA stores enjoy rabidly loyal customer bases as a result. Those strong store-level customer bases have translated to high unit-level economics, which is likely why the franchise has yet to close a store.

“It’s a simple cycle,” Wall said. “We keep costs low so that we can get the best owners, those owners run strong operations, which allow us to keep costs low for new owners.”

In addition to the low upfront investment and access to SBA loans, CBA takes on the full cost of purchasing land and construction new stores, which is then leased to the franchisee. Not only does that remove another financial burden from the franchisee, it means that CBA has a substantial financial investment in each new store.

“Christian Brothers shares in the financial risk side by side with franchisees, thereby creating a true team effort towards success,” Wall said. “Because of this, we are careful in our search for candidates who are the right fit. Maybe they lack the substantial net worth required by other franchises or even automotive industry experience. What matters is that they embody the values that Christian Brothers was founded on.”

That stringent vetting process and exceptional financial support for new owners have made Christian Brothers Automotive one of the strongest brands in franchising and a favorite of the Small Business Administration.

Any entrepreneur looking to make a substantial investment in their business would be well-advised to look into SBA loans. Prospective Christian Brothers franchisees have a unique advantage. Because of the brand’s exemplary reputation with the SBA, new owners are frequently awarded the agency’s most generous and coveted financing options.

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