Car Wash Business Financing up to $650,000
Starting a car wash business? We’ve helped many car wash businesses do just that. We can approve you for up to $650,000 within 1 business day. Start now with no obligations, no impact on your credit score, and no fees.
Car wash businesses have experienced tremendous growth in the last ten years, so it is no surprise that business owners are looking into financing options. We can approve you for car wash business financing up to $650,000 within 1 business day.
As of 2018, the car wash industry is worth over $33 billion. More people want the convenience of an automated car wash experience, and many business owners are capitalizing on that, with over 60,000 car wash locations in the United States alone. So whether you’re looking to open up a self-service, automated, or hybrid with gas included- read on to learn about the best financing options out there.
What Is a Car Wash Loan?
A car wash loan is a sum of money lent by a financial institution to a car wash business owner for funding business operations. Approved borrowers must repay a car wash loan within a predetermined time frame. Car wash loan borrowers are responsible for making scheduled payments in full for the duration of a loan’s term.
Most small business loans range from 2.5% to 8%. You determine a loan’s interest rate by the type of loan lender, the loan issued, business financials, and potential collateral. Variable rates fluctuate during a loan’s term, whereas fixed rates will remain stable during a loan’s term.
Uses for Car Wash Loans
Car wash business financing can be used for:
- Opening a new car wash (automatic, touchless, self-service, conveyor, drive-through, gas station hybrid)
- Remodeling an existing car wash
- Expanding a current car wash
- Rent or buy property
- Hire new employees.
- Purchase equipment (pressure washers, water storage drums, power sprayers, hoses, pressure tanks, ladders, vacuums, buckets/pails, sponges, shams, soap, polish, towels)
Entrepreneurs can expect to share their intended use for a car wash loan with their loan provider. Intended loan uses influence loan interest rates and terms. For example, a loan to scale an existing car wash that is already successful will carry a lower interest rate than a loan to start a new business because it carries less risk for the loan provider.
Car Wash Funding Options
Car wash industry entrepreneurs can fund their car wash with various options, including small business loans, commercial cash advances, equipment loans, and lines of credit. Finding the correct car wash funding option is often the first step to developing a successful business, so choose carefully.
SBA Loans and conventional business loans are among the most common car wash funding options that business owners pursue because they offer favorable interest rates and reasonable repayment terms.
Commercial cash advances are another car wash funding option. Commercial cash advances offer businesses immediate, fluid capital to cover short-term expenses or manage revenue shortages. If you need to make a costly, unexpected repair to your car wash equipment, merchant cash advance can offer quick and convenient funding.
Equipment will be one of the most significant expenses for a car wash owner. Equipment loans are small business loans intended to help businesses purchase their equipment to operate. This can include washing equipment such as vacuums, water systems, dryers, blowers, brushes or business equipment like POS systems.
Entrepreneurs may also apply for a business line of credit to fund their business. A business line of credit works similar to a personal credit card. A business line of credit allows business owners to pay off expensive purchases over time.
Tips for Car Wash Owners Trying to Qualify for Financing
Qualifying for a car wash loan can be challenging for some applicants, as financing eligibility requirements are often detailed and demanding.
Qualifying for a car wash loan as a first-time business owner requires thorough independent research. Here are a few common tips that will improve your chances of getting approved for car wash financing.
Have a Business Plan or Current Financial Statements
Oftentimes, car wash loans require a business plan before applying for a small business loan.
A business plan should include an executive summary, a description of the business, a market analysis, a marketing and sales plan, an analysis of competitor car washes, a summary of the business’s management team, a description of the business products, car detail services, and an operating guide. The more detailed the business plan is, the better.
Free Cash Flow Availability
Entrepreneurs can increase their chances of getting approved for financing by communicating their free cash flow amount and availability to lenders. Free cash flow availability is similar to a company’s financial statements but provides more information about how a borrower intends to pay back a business loan.
Boost Sales Growth
Lenders are more likely to fund growing businesses than shrinking businesses. Lenders like to see high sales growth, preferably 10% or higher, but any growth is good. Car wash businesses with low growth rates may consider contextualizing the factors contributing to slow growth, such as an ailing economy or seasonal trends.
Maintain Personal and Business Credit Scores
Lenders use credit scores to determine a business’s credibility. Credit scores indicate whether a business is managed properly and that the borrower is trustworthy and consistent. Business owners can show lenders they are trustworthy by prioritizing prompt credit card payments and maintaining their credit.
Collateral
Collateral in the form of financial assets significantly improves a business’s likelihood of getting approved for financing. Collateral provides loan lenders security on their investment in the event of unforeseen obstacles.
Pay Attention to the Economy
Like any small business loan, car wash financing is affected by the economy’s overall health. If the economy is experiencing a recession, banks will have less credit available to loan to businesses. Conversely, when the economy is doing well, banks typically have more credit available for business loans.
Car Wash Loans Pros and Cons
A loan is the most common way to fund a small business like a car wash. Below are some pros and cons of the traditional funding route for small businesses.
Pros
- Favorable interest rates
- Can lead to a mutually beneficially business relationship between lender and borrower
- Traditional loans backed by established financial institutions that often provide experienced guidance to first-time borrowers
Cons
- Long application processes with rigorous requirements
- Loan funds take longer to disburse than other small business funding options, making them ill-suited for short-term business expenses.
- Challenging to get approved for loans with favorable terms and rates
Other Industries We Finance
Frequently Asked Questions on Car Wash Loans
Like other small businesses, car washes require a lot of working capital to begin operation. Equipment, staff, and rent are all expenses that a new car wash needs to cover before becoming profitable. However, financing allows new car wash owners to stay in operation as their business builds momentum.
The cost to start a car wash business varies greatly, from $500,000 to a few million dollars. The primary factors that influence the price of starting a car wash are the business’s size and location. Loan interest rates and terms will also influence the cost of starting a car wash.
Favorable small business loans require 10%-25% of a business’s expected operating costs upfront for finance approval.
Typically, a credit score of 720 or greater is required to qualify for an average car wash loan at a traditional lender like a bank. A high credit score shows a conventional lender that a borrower will likely repay their loan on time. Conventional banks may approve loans for applicants with credit scores lower than 720, but the loan terms are likely to be less favorable.
Merchant cash advances have less stringent credit score requirements. However, a credit score of 500 or greater is required to qualify for a merchant cash advance.
Choosing a lender for car wash financing is fraught with risk. After all, prospective business owners will be investing tens, if not thousands, of dollars into a new business that could fail.
The risk involved in starting a new business requires thorough lender research. A suitable car wash loan lender will have social proof that their full service is reputable and easy to use. Good lenders will also clearly and effectively communicate the terms and conditions.
Yes, a car wash loan can be used to hire new employees if you have approval for such a loan. Loan products come in a variety of shapes and sizes. Some loans only allow for equipment purchases, while others have more flexible terms.
Funding Your Business Is Our Business
Car Wash Loans Can Help Your Business Grow
Car wash business financing can help your company grow by providing capital that can be used to scale profitable business practices. There are various funding options available to car wash business owners, including loans, cash advances, and lines of credit.
While loans are a favorable funding option for many auto car wash businesses, they are not suitable for every business’s needs. For immediate cash flow, consider a cash advance from a licensed, reputable money lender.
Does Your Business Need Funding Today?
There’s no fee or obligation, and it won’t impact your credit.
$5,000 – $1,000,000
Talk to a rep at (855) 433-8641
Mon – Fri | 9:00am – 8:00pm