DEALERSHIP TYPES
What Type of Dealership Are You Financing?
Auto dealership real estate is a specialized CRE category with unique financing requirements tied to franchise agreements and OEM standards.
New Car Franchise Dealership
OEM-backed, image program compliantToyota, Ford, Honda, BMW, etc. Large footprint (2–10 acres) with showroom, service bays, parts dept, and lot. OEM image programs may require periodic facility upgrades. Franchise backing significantly improves lending terms.
Used Car / Independent
Smaller footprint, flexible layoutBuy Here Pay Here, pre-owned lots, and independent dealers. Smaller properties (0.5–2 acres). Lenders evaluate dealer track record and inventory financing separately. SBA is a common path for property acquisition.
Service Center + Sales
Combined auto service and retailMulti-bay service operations combined with vehicle sales. Tire shops, transmission specialists, or general repair shops that also sell vehicles. SBA 504 covers both the real estate and service equipment.
FINANCING OPTIONS
Loan Options for Dealership Properties
Dealership real estate financing is separate from floor plan (inventory) lending. Focus here is on the property itself.
SBA 504
Best for buying your dealership propertyIdeal for dealer-operators buying the real estate under their franchise. OEM image program costs and service equipment can be rolled into the total project.
Conventional Bank
Franchise dealers, fastest closeBanks with auto dealership experience offer competitive terms for established franchise dealers. Some have dedicated dealer lending divisions.
SBA 7(a)
Real estate + equipment + working capitalCombine property purchase, lifts, diagnostic equipment, and opening working capital. Good for independent dealers and smaller franchise operations.
DSCR / Investment
Investors owning dealership real estateFor investors who own the real estate and lease to a dealer-operator. Lenders underwrite the lease and the dealer-tenant’s financials.
Typical ranges, updated September 2026. Your terms depend on the property, the borrower and the lender.
KEY METRICS
What Lenders Evaluate for Dealership Loans
WORKED EXAMPLE
Example: Buying the Dealership Property and Funding an OEM Image Upgrade
Example: a franchise dealer buys its $6,000,000 property and must complete a $1,500,000 image upgrade required by the manufacturer — a $7,500,000 project. Assumptions for illustration only: a 6.5% CDC rate fixed for 25 years and a 7.0% bank rate amortized over 25 years; the bank alternative at an example 7.0% over 25 years with 30% down. Computed with our SBA 504 calculator and the same payment formula.
| SBA 504 (15% down) | Bank loan (30% down) | |
|---|---|---|
| Cash down | $1,125,000 | $2,250,000 |
| Loan(s) | CDC $3,000,000 + bank $3,375,000 | $5,250,000 |
| Monthly payment | $44,110 | $37,106 |
The CDC share here, $3,000,000, is within SBA’s $5,000,000 limit on a standard 504 loan. Floor plan financing for inventory stays separate — but the lender counts floor plan interest as an operating cost when it measures the dealership’s cash flow against these payments, so a high-interest floor plan reduces the real estate loan you can carry.
Typical ranges, updated September 2026. Your terms depend on the property, the borrower and the lender.
THE PROCESS
How Dealership Financing Works
Share Your Deal
Property address, acreage, building sqft, franchise brand, purchase price, and any OEM image program requirements or renovation plans.
Submit to BestLoanUSA
Single application with dealership financials, personal credit, and franchise agreement details. No hard credit pull.
Advisor Review
Dedicated advisor evaluates your franchise standing, dealership performance, OEM requirements, and property specifics to recommend SBA, conventional, or specialized auto lending.
Lender Matching
We submit to lenders with auto dealership experience. You receive competing term sheets.
Underwriting & Appraisal
Dealership-specific appraisal including special-purpose valuation. Provide dealer financial statements, franchise agreement, and OEM correspondence.
Close & Operate
SBA: 30–90 days. Conventional: 30–45 days. OEM image renovations can begin on a draw schedule post-close.
Free tools
Run the numbers
The same metrics a lender checks — free, instant, no signup. Each result links straight into an application.
- SBA 504 Loan Calculator Estimate your SBA 504 loan structure — see the three-part split (borrower, CDC, bank), monthly payments for each portion, and total project financing.
- Commercial Mortgage Calculator Estimate your monthly CRE loan payment, total interest cost, and full amortization schedule. Compare loan structures before you apply.
FAQ
Frequently Asked Questions
Is dealership real estate financing different from floor plan lending?
Yes, completely separate. Floor plan financing covers vehicle inventory and is provided by captive finance companies or specialized lenders. Real estate financing covers the property itself — the land, showroom, service bays, and lot. Most dealers have both but from different sources.
Can an OEM image upgrade be financed with the dealership property?
Yes. SBA 504 can include the upgrade in the project cost, and banks can finance it with the purchase or as a separate construction draw. In our example, a $6,000,000 property plus a $1,500,000 image program costs $44,110 a month with SBA 504 and $1,125,000 down, or $37,106 a month with a bank loan and $2,250,000 down.
How do OEM image programs affect financing?
OEMs (Toyota, Ford, BMW, etc.) periodically require franchise dealers to renovate facilities to meet updated brand standards. These image program costs can be substantial. SBA 504 can include these costs in the total project financing. Some OEMs provide financial incentives to offset image program costs.
Can I buy a dealership and the real estate together?
Yes. SBA 7(a) can combine the business acquisition (goodwill, franchise rights, inventory) with the real estate purchase up to $5M. For larger deals, separate financing for the business and real estate may be structured. Your advisor will recommend the optimal structure.
Do independent (non-franchise) dealers qualify?
Yes, but financing terms are stricter. Without OEM backing, lenders often look for stronger personal credit, a larger down payment and a longer operating history. SBA remains available for independents with proven performance.
What makes dealership properties special-purpose?
Dealership properties have showrooms, service bays, parts departments, and large paved lots designed specifically for auto retail. Converting to other uses is costly, which affects appraisal methodology. Appraisers often lean on income and cost approaches because comparable sales are scarce.
What if I just want to own the real estate and lease to a dealer?
Investor-owned dealership real estate leased NNN to a dealer-operator can be financed with DSCR or conventional loans. Lenders review the lease term, the dealer’s financials and the franchise agreement.
Related on BestLoanUSA
Financing options
All loans →- Auto Repair An auto repair shop loan finances the building a repair business operates from — buying the garage, adding service bays or refinancing. Owner-operators can use SBA 504 with 10–15% down, and shop equipment can be financed alongside it. AutomotiveSBA 504
- C-Store & Gas A gas station or convenience store loan finances the property and, for an owner-operator, often the business with it. Owner-operators commonly use SBA loans with 15% down, since lenders treat these as special-purpose properties; investors buying a net-leased c-store use DSCR or bank loans at about 6.75–8.75%. AutomotiveDSCR
- Car Wash A car wash loan finances the purchase, ground-up construction or refinance of a car wash property — express tunnel, self-serve or full-service. Owner-operators often combine SBA or bank financing for the real estate with equipment financing for the wash system. AutomotiveSBA 504
- Owner-Occupied An owner-occupied commercial real estate loan finances a building your own business uses — for SBA loans, at least 51% of an existing building or 60% of a new one. SBA 504 and 7(a) allow as little as 10% down; conventional bank loans usually need more, at rates around 6.25–8%. AutomotiveSBA 504
Guides & articles
All articles →- SBA 504 Loans for Commercial Real Estate: 10% Down How the SBA 504 loan lets a business buy its own commercial property with as little as 10% down — the structure, who qualifies, costs and the process. AutomotiveSBA 504
- SBA 504 vs Conventional Commercial Mortgage: Cost and Fit SBA 504 vs a conventional bank mortgage for buying your own building: down payment, rate, fees, eligibility and what each owes at year 10, with a $2M example. SBA 504SBA loans
- How to Buy Your Own Commercial Building: Owner's Guide A step-by-step guide to buying a building for your business: when owning beats leasing, SBA 504 and bank loans, down payment and closing. SBA 504Automotive
Glossary
All terms →More calculators
All calculators →- LTV Calculator Calculate your Loan-to-Value ratio or find the maximum loan amount for your commercial property. See which programs you qualify for at your LTV. Loan-to-value
- DSCR Calculator Calculate your Debt Service Coverage Ratio instantly. See if your property qualifies for CRE financing and which loan programs are available to you. DSCR
- Debt Yield Calculator Calculate Debt Yield (NOI ÷ Loan Amount) — the metric CMBS and institutional lenders prioritize over DSCR and LTV. Find your maximum loan amount based on target debt yield. DSCRLoan-to-value