Quick answer
Panel beaters usually borrow for spray booths, measuring and frame systems, ADAS calibration gear, tow trucks and courtesy cars, plus working capital to cover parts and wages while insurers process invoices. Equipment finance suits the booth and tooling because the gear secures the loan. A line of credit or invoice finance suits the gap between finishing a repair and being paid. Banks lend readily to established shops with clean accounts; non-bank lenders assess recent trading when the bank won't.
Key points
- Insurance work is the main cash flow risk: the parts, paint and labour go out weeks before the insurer settles the invoice
- The industry code of conduct has long set 30 days as the outer limit for insurers to pay repairers, and repairers say it often slips
- Spray booths, frame systems and calibration targets hold value, so they're usually financed against the equipment itself
- The ATO's total expenses benchmark for smash repairers climbs from 49–68% of turnover in the smallest band to 75–88% above $300k
- A big hail event can double a shop's workload overnight, and the cash to fund it has to come from somewhere
A smash repair job is paid for twice before the shop sees a dollar. Parts, paint, consumables and technician hours are bought up front, the car goes home looking new, and then the invoice joins an insurer’s payment queue. Most panel beaters who approach a lender aren’t struggling for work. They’re carrying their customers’ insurers.
That’s the lens lenders use too. They want to know who pays you, how fast, and what the shop’s equipment is worth if things go wrong.
Why does insurance work squeeze a panel shop’s cash?
The Motor Vehicle Insurance and Repair Industry Code of Conduct, which repairers and insurers in NSW must follow, has long set 30 days as the most an insurer should take to pay a repairer’s invoice. Repairers regularly report waits longer than that, and supplementary quotes for hidden damage can hold an invoice up while the assessor signs off. The code was being reviewed in 2025, with repairer groups pushing for shorter payment times.
Meanwhile, the money going out doesn’t wait:
- Parts suppliers usually want payment within their own terms, often 30 days from the end of the month or less.
- Wages go out every week or fortnight, with super now paid alongside each pay run.
- Paint and consumables are a constant draw, and prices rarely fall.
- Customer excesses come in at pickup, but they’re a small slice of the job.
A shop turning over $120k a month with insurers paying at around 40 days can easily have $150k or more tied up at once. Lenders call this your debtor days, and it’s the number most worth knowing before you apply.
Network repairer or independent: does a lender care?
It changes how they read your statements, though it doesn’t change whether you can borrow.
| Shop type | What the income looks like | What a lender checks |
|---|---|---|
| Insurer network or preferred repairer | Steady volume from one or two insurers, tighter pricing | Concentration risk, the length of the agreement, payment history |
| Independent, insurer-authorised work | Jobs from many insurers after customer choice | Spread of payers, approval delays, supplementary quotes |
| Private and fleet work | Cash or account customers, better margins | Fleet contract terms, bad debts |
| Restoration and custom work | Long jobs paid in stages | Progress payments, deposits held |
If 70% of your work comes from one insurer, say so, and explain the agreement. A lender who hears it from you upfront worries far less than one who spots it in the statements.
What do panel beaters typically borrow for?
- Spray booths and paint mixing rooms. Often the biggest single purchase, and one with a long useful life.
- Chassis measuring and frame straightening systems to restore structural geometry after a big hit.
- ADAS calibration equipment. Modern cars carry cameras and radar that need recalibrating after windscreen, bumper or alignment work. Owning the targets and scan tools keeps that revenue in-house.
- Aluminium repair bays, including dedicated welders, rivet tools and dust extraction.
- Tow trucks and courtesy cars.
- Working capital for parts, paint and wages while insurers pay.
- A second site or a bigger workshop, sometimes by buying out a retiring repairer.
Equipment that holds value is the easiest thing in a panel shop to fund. Equipment finance or a chattel mortgage secures the loan on the gear itself, which usually costs less in total than borrowing unsecured. Our equipment finance calculator shows how a repayment changes with the term and any balloon.
Have a booth quote or an insurer backlog on your desk right now? Send us the details. The form is around a minute’s work, and your credit history stays untouched by the enquiry.
Which loan suits which problem?
| What you need | Finance that usually fits | Why |
|---|---|---|
| Spray booth, frame rig, calibration gear | Equipment finance or chattel mortgage | The asset secures the loan; repayments run over its working life |
| Tow truck or courtesy cars | Commercial vehicle finance | Vehicles are easy for lenders to value |
| Waiting on insurer invoices | Invoice finance | Advances grow with your approved work |
| Uneven monthly cash needs | Business line of credit | Pull funds out for parts, pay them back when insurers settle |
| Buying another shop | Business acquisition loan | Sized on the target’s earnings and assets |
Invoice finance works particularly well here because insurers are strong payers. Our invoice finance calculator gives a rough idea of the fees in dollars.
How does hail change the picture?
Hail is the panel industry’s strangest boom. A big storm over a city can fill every bay for months, and insurers often send work out in waves. On paper, it’s the best period of the year. In the bank account, it can be the tightest.
More cars means more parts, more casual technicians, sometimes a temporary paintless dent repair team, and occasionally a second site leased for overflow. All of it is paid weeks before the hail claims settle. Spring and early summer are the usual danger window, since that’s when severe storms are most common across the eastern states.
Wet winters bring their own spike in minor collisions, while January can be quieter as people travel. Those swings show up plainly in a year of bank statements, so it helps to label them in a short note. If your income moves a lot through the year, our page on business loans for seasonal businesses explains why a revolving limit often beats a lump sum.
How do lenders judge a smash repair shop’s numbers?
The ATO publishes small business benchmarks for panel beating and smash repairs. Its key ratio is total expenses to turnover, and for 2022–23 it runs from about 49% to 68% for shops turning over $50k to $150k, 56% to 75% for $150k to $300k, and 75% to 88% above $300k. Larger shops spend a bigger share of turnover on wages, rent and paint, so margins get thinner as they grow.
Lenders also look at:
- Licensing. In NSW, a repair business needs a motor vehicle repairer licence and every technician needs a tradesperson certificate for their class of work. Other states run their own schemes. A lender wants to see you’re properly registered.
- Your lease. Booths and extraction systems are expensive to move. A long lease with options gives the lender confidence the business stays put.
- Tax position. An ATO debt on a payment plan you’re meeting is not a deal-breaker for most non-bank lenders. See ATO tax debt business loans.
What paperwork should a panel beater prepare?
- Your trading account statements, ideally the last six to twelve months
- Recent BAS and your latest financial statements or tax returns
- An aged debtors report, split by insurer
- Copies of any insurer network or fleet agreements
- Supplier quotes for the booth, rig or vehicle
- Your lease and repairer licence details
- An ATO portal statement if you carry tax debt
Worked example: funding a hail season
Illustrative figures only. A two-site smash repairer in Sydney’s west turns over about $1.8m a year. After a severe storm in November, insurers allocate around 300 extra hail repairs over four months. The owner needs roughly $90k for extra parts and casual wages before the first payments arrive, and the shop’s ageing booth won’t keep up with the volume.
The new booth, quoted at $165k installed, is financed across seven years with the booth itself as the lender’s security. For the cash gap, the business sets up invoice finance across its insurer accounts, so each approved hail invoice releases most of its value within days. As the backlog clears and insurers pay, the facility shrinks back. The bank offered to help with the booth but wanted a mortgage over the family home for the working capital, which the owners chose to avoid.
Ready to get the next job out the door?
A full workshop should feel like good news. With the gear funded against itself and the insurer gap covered by flexible finance, it can.
Whether it’s a booth, a backlog or both, we’re happy to look at the numbers with you. The form is quick, about sixty seconds, and your credit score isn’t touched when you send it. Nothing gets passed around a list of finance companies. One of our people reads what you’ve sent and rings you personally. The more exact your turnover, insurer receivables and requested amount, the better our first suggestion will match the shop.
Frequently asked questions
Can a panel beater get a loan while waiting on insurer payments?
Yes. Lenders see insurer receivables as reasonably reliable because the payer is a large, regulated company. Invoice finance can advance most of each approved invoice, and a line of credit can cover parts and wages until the money lands. Bring an aged debtors list showing which insurers owe what.
How much does a spray booth cost to finance?
It depends on the size, heating system and whether it's new or used, so get a written quote first. A booth is usually funded with equipment finance or a chattel mortgage over the booth itself, and installation, extraction and electrical work can often be included in the same facility if the supplier itemises them.
Do lenders care whether I'm on an insurer's repairer network?
They notice it. Network work brings steady volume but tighter pricing and one or two dominant payers. Independent work earns better margins but is less predictable. Neither rules you out; lenders mainly want to see how concentrated your income is and how quickly each source pays.
Can I finance ADAS calibration equipment?
Usually, yes. Calibration rigs, targets and scan tools are business equipment with a resale market, so equipment finance generally fits. Some shops instead pay a mobile calibration provider per job until volume justifies owning the gear, which is worth costing out before you borrow.
Will a bank lend to a smash repair business?
Often, yes. A shop with two or more years of profitable accounts, a solid lease and property to offer as security is a good bank customer, and the bank's offer is frequently the cheapest. If the bank declines, wants your home as security or takes too long, non-bank lenders can assess bank statements and insurer receivables instead.