WASHINGTON, D.C., March 13, 2024 –The U.S. House Small Business Committee’s Oversight, Investigations & Regulatory Subcommittee held a hearing to examine the challenges and opportunities small business currently face when in need of capital. The hearing looked closely at the reasons some small businesses have pursued investment from private credit as opposed to more traditional sources, such as small community banks or loans backed by the U.S. Small Business Administration (SBA).

Subcommittee Chairwoman Van Duyne (R-TX) noted in her opening remarks that inflation has contributed to high interest rates that lead to loans that are too expensive for small businesses. She also argued that new regulations imposed by the Biden Administration have made it harder for banks to distribute loans. On several occasions, two of the witnesses mentioned that rising consolidation of local community banks has made it harder to find investment sources who understand the local economy and are willing to provide affordable lines of credit to small businesses.

Many independent automotive repair shop owners are all too familiar with this struggle. New technologies are upending the automotive repair industry. Repairers must contend with an influx of new electric vehicles, telematics, autonomous and advanced driving systems that require sophisticated repairs, and more. To continue serving their customers, repairers have had and will need to continue to invest in costly facility and equipment upgrades, as well as training. Some of these expenditures may require assuming debt.

Congresswoman Gluesenkamp Perez (D-WA) – herself an auto repairer, as well as a member of Congress’ Small Business Committee – attested to the access to capital difficulties automotive repair businesses often encounter. She stated, “I own an auto repair shop with my husband and we bought a building with a 504 [SBA] loan. The only reason it worked was because of the sellers. They were committed to seeing that property remain in the trades. God bless them for that, but that’s rare, and we can’t let our small businesses be at the mercy of someone’s good intentions.”

ASA Board of Directors Chairman Scott Benavidez commented:

“Many independent repairers have had to spend heavily on new equipment and other investments just so their businesses can stay afloat and relevant in this turbulent automotive environment. Personally, I’ve had to invest in a whole host of specialty equipment for my repair shop over the last few years. It’s never been harder for independent repair shops to stay in business. ASA appreciates Chairwoman Van Duyne and the subcommittee for holding a hearing on a topic of such critical importance to the automotive repair community at this time. We hope that Congress and the federal government can find solutions that make it easier for small businesses like mine to thrive now and well into the future.”

ASA is the largest and oldest national organization committed to protecting the automotive repair industry with ONE VOICE. Our members own and operate automotive mechanical and collision repair facilities responsible for the majority of all, post warranty, repair services in the United States. ASA advocates for the interests of its members and their customers in Washington, D.C. The education, resources, and services ASA provides empowers its members in all 50 states to remain trusted stewards of mobility in their communities. www.ASAShop.org