Home › Buying a business › Mechanical workshop
Written for workshop buyers
Buying a mechanical workshop, without buying a job.
Every listing leads with a return. It is quoted on PEBITDA — proprietor’s earnings — which adds back what the owner pays themselves, because the buyer is assumed to turn the spanners. Pay someone qualified properly and the same shop reads very differently.
Subject to lender criteria, security position and eligibility. Figures on this page reviewed quarterly — last reviewed August 2026.
30 minutes with Priyank — former bank lending manager and commercial credit analyst, member of the Australian Institute of Business Brokers.
Download the free 5-page guide (PDF) → No email required.
Start here
The percentage on the ad, decoded.
A shop showing $300,000 on a $385,000 price advertises a 78% return. But someone qualified has to do that job. Pay them properly, use the rent you will actually pay, allow for the equipment already due — and the business has not changed at all. Only your understanding of it has.
| The rebuild | Amount | Why it moves |
|---|---|---|
| PEBITDA as advertised | $300,000 | The number the listing leads with. |
| A qualified person at a real market wage | − $105,000 | Someone has to turn the spanners. If it is you, that is a job, not a return. |
| Rent under the lease you will sign | − $22,000 | The accounts carry the old rent. You will not. |
| Equipment due inside 24 months | − $14,000 | Hoists and diagnostic gear already at the end of their life. |
| “One-offs” that appear every year | − $9,000 | A one-off that recurs is an expense with a nickname. |
| What the lender assesses | $150,000 | 78% becomes 39% — the same shop, honestly stated. Still a real return on borrowed money. Just not the one on the listing, and your loan is sized on this number. |
Illustrative only, to show the shape of the adjustment — not a valuation and not a representation about any particular business. General information only, current at August 2026.
Ask every agent for both figures. Better listings publish PEBITDA and EBITDA. The gap between them is the wage of the person doing the work. Where only PEBITDA is given, that gap has not disappeared — it just has not been shown to you.
Run the rebuild on a real listing.
Type the numbers from any listing. Edit every adjustment — they are yours, not ours.
Enter the asking price and advertised PEBITDA to see the rebuild.
Illustrative arithmetic on figures you enter — not a valuation, not advice, and no representation about any particular business. Lenders make further adjustments of their own. General information only.
Ask this on every shop you see
What actually prices a workshop.
Customers come for one of three things, and which one decides what you are actually buying.
They come for the site
Passing trade, an arterial road, convenience. Durable goodwill — but it lives entirely inside the lease. Check the lease first. Worth paying for.
They come for the mechanic
Dave has looked after their car for fifteen years. That goodwill walks out the door the day Dave does. Pay less, or pay later.
They come for the price
Cheapest in the area. That was never goodwill — it is a discount, and the shop up the road can copy it on a Tuesday. Not goodwill at all.
Nearly every workshop is a blend. Working out the blend before you offer tells you what you are buying, how long a handover has to run, how hard the restraint needs to bite — and whether the lease is a detail or the whole transaction.
The gap most buyers miss
If the lease runs out before the loan does, that is the deal.
Lenders generally want the lease, options included, to run at least as long as the loan. A seven-year facility against three years of lease and options leaves four years uncovered — and lenders answer that by shortening the term, repricing it, or declining.
Ask for the term and the options in the very first conversation. It is one question, it costs nothing, and it screens out shops before you fall for one. Site-bound goodwill is the most valuable kind and the most fragile: everything you pay for location assumes the business keeps trading from that address.
Lender treatment of lease and option terms varies by lender, security position and circumstance. Subject to lender criteria, security position and eligibility.
The first visit
Half a day and a notebook screens out most of what you look at.
Before you engage a solicitor, an accountant or us — before you spend a dollar.
What to count while you are there
- Bays and working hoists. Capacity is qualified hands in bays; everything else is a story about capacity.
- Cars on site, and how many are moving. A yard full of stationary jobs is a bottleneck, not demand.
- How far ahead the diary is booked. Two weeks out is a business. Same-day is a discount.
- Age of the diagnostic gear against the age of the cars in the car park it serves.
- Whether the owner is in a bay. If they are, you are buying a job with a business attached — legitimate, but it is not a 78% return.
What to ask the owner, face to face
- How many years are left on the lease, including options?
- Who do your regulars ask for by name? If the answer is them, that is the deal.
- What breaks in the first month after you leave? “Nothing” is the wrong answer in any business.
- Which customer or fleet account would hurt most to lose?
- What has changed in the last twelve months — rent, staff, a competitor opening, a contract ending?
- What have you stopped spending on? This finds the deferred equipment and the switched-off marketing.
- Has there ever been a tank on site, or a spill? Ask early, ask casually, note the reaction.
- Why this price? A multiple of a number you have not verified is a hypothesis, not a valuation.
Sit in reception for an hour. Listen to what customers say when they arrive and when they collect. Do they ask for a person by name? Do they query the price or accept it? Do they book the next service on the way out? No report tells you what an hour in a waiting room will. Then run two searches before you go back: a PPSR search on the vendor entity and by serial number for the hoists and major plant, and the reviews read all the way back — you are looking for when a reputation changed, and whether it names a person.
The screening register
The 12 deal-killers — and what fixes each one.
Not a post-mortem, a filter. Run every workshop past this list and most will save you the cost of finding out the hard way. One is a negotiation. Three is a walk. Anything touching the lease counts double.
1 · Verbal on the lease, nothing on paper — The landlord is “happy to do a new lease” and always has been.
→ Condition on a signed lease. No signature, no settlement.
2 · A lease shorter than the loan — Term plus options runs out before your facility does.
→ Renegotiate before contract, not after.
3 · PEBITDA taken at face value — The advertised return assumes you work for free.
→ Rebuild it. Price and borrow on that number.
4 · Rent in the accounts that is not your rent — Earnings built on the old rent; the new lease carries a higher one.
→ Use the rent you will actually pay, everywhere.
5 · Site history nobody will discuss — No answers on tanks, spills or previous uses.
→ Environmental assessment as a condition.
6 · Stock that cannot be counted — Two systems that do not talk, and an offer to “reduce it down”.
→ Cap it, exclude dead lines, condition a clean count.
7 · Equipment on finance — Hoists or alignment gear already secured to a financier.
→ PPSR by serial number. Payouts at settlement.
8 · Goodwill wearing the owner’s name — Customers ask for them; reviews name them.
→ Long handover, hard restraint, price deferred.
9 · One account carrying the shop — A fleet or dealership contract above a quarter of revenue.
→ Get it contracted, or reprice the risk.
10 · Unpaid super or award exposure — Entitlements behind, classifications not matching duties.
→ Quantify, indemnify, adjust. Or walk.
11 · Approvals that walk out the door — Roadworthy testing resting on the departing owner’s approval.
→ Carve out the revenue, or secure the person.
12 · No restraint, no handover — They intend to stay local and stay friendly with the customers.
→ No restraint, no deal.
Three is a walk — and that is a result. At this stage walking costs you a few hours and a couple of searches. Buying the wrong workshop costs the deposit, the loan, the guarantee over your house, and several years. While you are still looking, walking away is free — which is exactly why this is the cheapest moment to be strict.
One mechanic, start to finish
“My home settled on 26 September 2023 and my workshop settled ten days later.”
Simarpreet Singh owns Singh Car Repairs. He came to us wanting to buy the workshop he was working in. In his own words, from his Google review:
“I wanted to buy my own workshop. Most mortgage brokers I spoke to could not understand my business. Priyank did not just find me a loan… He is a property developer and investor himself, so he looks at a commercial property the way a buyer should look at it, not the way a bank does. I have not found that in any other finance broker.”
“He negotiated $200,000 off the purchase price before we went to any lender, set the trust structure up properly first, and refinanced my home loan to release the equity. My home settled on 26 September 2023 and my workshop settled ten days later.”
“In 2025 he refinanced the commercial loan and cut my interest rate by 1.85%. That is over $15,000 a year back in my business, and he got the bank’s approval fee down from $6,143 to $600.”
Simarpreet Singh, Owner, Singh Car Repairs · from his Google review, August 2026, published with his permission. Client-reported outcomes in the client’s own words; your circumstances and result will differ.
Note the order. The price was negotiated before a lender was approached, the structure was set before the purchase, and the equity was released to fund the deposit. None of that is available to a buyer who has already signed.
The funding
Funding is decided on the submission, not only the deal.
Same deal, same buyer, same lender: a complete pack is read once and comes back with room to negotiate on gearing, pricing and exceptions. A partial pack is read twice, and doubt attaches to the file. It moves the terms, not just the timeline.
Maximise the funding
The rebuilt earnings and the lease presented the way credit actually assesses them — to the desks that write workshop acquisition lending, not the ones that discount it.
Argue the exceptions
The case put directly to the decision-maker. The decision is theirs; the argument is ours — made by someone who used to sit on their side of the desk.
Structure it
Business only, business plus the site, or the site held separately. The structure decides the gearing, and it is chosen before the application, not after.
Hold the timeline
Lease and settlement clocks mapped backwards, so the finance clause is dated from the plan rather than from optimism.
Do this before you negotiate, not after. Get your borrowing capacity assessed while you are still looking. It costs nothing and changes everything: you learn your real ceiling, which lenders back this industry, and how the lease term affects what you can borrow — so when you find the right shop, you negotiate like someone who can settle. Almost nobody does this first.
We work on business and commercial transactions from $400,000, which in this sector usually means the workshop together with the premises, or a purchase carrying real plant. Business brokers: we rebuild a buyer’s earnings free and tell you within 24 hours whether they can settle — how that works for your listings.
Take it with you
The 5-page guide is free, and built to go in the car.
The 5-page guide
The PEBITDA rebuild worked line by line, the site-versus-mechanic-versus-price test, the lease-against-loan timeline, the first-inspection checklist, the 12 deal-killers with their remedies, and a side-by-side scorecard for comparing three workshops as you inspect them.
Direct download. No email required.
Send us a shop
The five documents, the listing, the revenue split and the equipment register. A written action plan comes back within one business day — the funding pathway for that specific workshop, an indicative pricing band, and the finance clause date your contract needs.
Straight answers
Fair questions.
Why do mechanical workshop listings advertise such high returns?
Because they are quoted on PEBITDA — proprietor’s earnings before interest, tax, depreciation and amortisation. The word doing the work is “proprietor’s”: the figure adds back what the owner pays themselves, on the assumption that the buyer turns the spanners. It is a definition, not a trick — but it means the advertised return assumes you work for free. Ask every agent for PEBITDA and EBITDA. The gap between them is the wage of the person doing the work.
What is the real return on a mechanical workshop once a wage is counted?
It depends entirely on the shop, but the shape of the adjustment is consistent. On an illustrative $385,000 purchase advertising $300,000 PEBITDA — a 78% return — taking out a qualified person at a real market wage, the rent under the lease you will actually sign, equipment due inside 24 months and the “one-offs” that appear every year can leave roughly $150,000, or about 39%. Still a real return on borrowed money. Just not the one on the listing, and your loan is sized on the lower number. Illustrative only, not a valuation.
What actually creates the goodwill in a workshop?
One of three things, usually a blend. The site — passing trade on an arterial road; durable, but it lives entirely inside the lease, so check the lease first. The mechanic — customers who have asked for the same person for fifteen years; that goodwill walks out the door the day they do, so pay less or pay later. The price — cheapest in the area, which was never goodwill; it is a discount, and the shop up the road can copy it on a Tuesday. Working out the blend before you offer tells you how long the handover has to run and how hard the restraint needs to bite.
Does the lease term matter when buying a mechanical workshop?
It is often the whole transaction. Lenders generally want the lease, options included, to run at least as long as the loan. A seven-year facility against three years of lease and options leaves a gap, and lenders respond by shortening the term, repricing, or declining. Ask for the term and the options in the very first conversation — it is one question, and it screens out shops before you fall for them. Subject to lender criteria, security position and eligibility.
Is the equipment included when you buy a workshop?
Not always, and this is a common and expensive surprise. Hoists, alignment gear and diagnostic equipment are frequently secured to a financier. Run a PPSR search on the vendor entity and by serial number for the major plant, and have any payouts dealt with at settlement. Ten minutes of searching before you go back for a second look.
Can you get finance to buy a mechanical workshop?
Yes. What is achievable depends on the rebuilt earnings, the lease and option terms against the loan term, the security position, and whether the premises come with it. Get your borrowing capacity assessed before you start negotiating — you learn your real ceiling and negotiate like someone who can settle. Deposit workings are set out on our business deposit guide. Subject to lender criteria, security position and eligibility.
Next step
Talk to us before you sign.
A finance clause dated from the funding plan, and a funding pathway scoped for this specific workshop, its lease and its clocks. Written action plan within one business day of a complete pack.
No application, and no lender sees anything until you say so. We’re paid when a deal settles — if the numbers say walk, we’ll still tell you to walk.