Finimpact

Best Car Wash Financing Options

The car wash industry accounts for about $5.8 billion dollars each year, with more than 8 million vehicles using a car wash each day. Despite these figures, it can be a challenge to obtain the capital you need to operate a car wash.

Best Car Wash Financing Options
Anna Baluch
Written by:Anna Baluch
Freelance Copywriter

A car wash business requires investments in the location, equipment, and marketing that will allow you to stand out from the crowd.

A car wash is also very expensive to start as you’ll need much more than soap and water, regardless of if you go with a hand car wash or automatic car wash. You can also expect to pay quite a bit for permits and licenses.

The good news is there are a variety of car wash financing solutions to help you meet your goals. Keep reading to learn more about what they are and how they work.

Our Top Picks for Best Car Wash Financing Option

biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
forafinancial
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Credit Score
Min. Credit Score 550+
Loan Amount
Loan Amount $5K-$750K
Loan Repayment
Loan Repayment 4-15 months
credibly
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Credit Score
Min. Credit Score 500+
Loan Amount
Loan Amount $5K-$400K
Loan Repayment
Loan Repayment 6-18 months

How to Choose the Best Car Wash Financing Option

There are plenty of car wash financing options on the market. That’s why it’s important to compare them all before you make any commitments. While ranking the best car wash loans in 2022, our experts focused on these factors.

  • Loan Features: As a car wash owner, large loan amounts, lengthy terms, and flexible repayment terms are ideal. In some cases, however, smaller, short-term loans might come in handy.
  • Application process: When it comes to applying for a car wash loan, chances are you’d like to do so online, from the comfort of your own home or office with minimal documentation. Prequalification tools, which allow you to check loan offers without any impact to your credit can be useful as well.
  • Interest rates and fees: The lower the interest rate and less fees you have to pay, the more you’ll save on financing your car wash. A competitive rate can result in hundreds or even thousands of dollars in savings.
  • Qualification process: If you’re a startup car wash, you’ll want a loan with lenient minimum credit score, annual revenue, and business history requirements.
  • Customer support: Depending on the lender, you can receive answers to your questions and assistance with your application via phone, email, online chat, or website features like loan calculators and FAQ pages.
  • Online user reviews: Ratings and reviews from independent, third-party sites like Trustpilot and Better Business Bureau (BBB) can help you choose reputable lenders for your car wash loans.
  • Perks and Bonuses: Extra like hardship assistance and free credit score monitoring can make any car wash loan more appealing.

Best Car Wash Loans for 2022 - Full Overview

1. Biz2Credit: Best for Commercial Real Estate Loan

Biz2Credit offers commercial real estate loans for commercial properties, like car washes. You can think of a commercial real estate loan as a mortgage for your car wash. Whether you’d like to purchase an existing car wash or start from scratch, you may get approved for up to $6 million in funding.

Pros
High borrowing limits: Biz2Credit’s commercial real estate loans go up to $6 million so you should have enough to cover the cost of your car wash property.
Quick application: Once you fill out an application, you’ll find out what you’re eligible for in minutes.
Fast funding: Depending on when you apply, you can receive your funds in just 72 hours after approval.
Cons
Strict eligibility criteria: Biz2Credit does have rigorous requirements that may be difficult to meet.
Extra fees: Even though the fees aren’t clearly disclosed, you may have to pay between 1% and 6% in origination fees.

Biz2Credit’s commercial real estate loans range from $250,000 to $6 million with terms between 12 and 36 months and interest rates that start at 10%. To qualify, you need a credit score of at least 660, at least $250,000 in annual revenue, and a business track record of 18 months or more.

The Bottom Line

If you have good credit, high revenue, and have been in business for some time, a Biz2Credit commercial real estate loan can provide you with ample capital for a car wash property.

Try Biz2Credit

2. Fora Financial: Best for Merchant Cash Advance

Fora Financial is a fintech lender with a variety of loan products, including merchant cash advances (MCAs). With a MCA, you’ll receive a lump sum of money in exchange for a percentage of the future debit and credit card sales you earn from your car wash customers. You can enjoy fast cash and flexible repayment terms.

Pros
Leninant requirements: You can get approved for a merchant cash advance from Fora, even if you have bad credit.
Quick application: The online application process takes minutes to complete.
Fast funding: Depending on when you submit your application, you may receive the funds in as little as 72 hours.
Cons
Rates might be high: If you don’t have the best credit, you can expect higher than average interest rates.
Fees: You might have to pay origination fees, late fees, and other fees in addition to interest.

With a Fora MCA, you can borrow anywhere from $5,000 to $500,000 and make monthly repayments. You may get approved with a credit score of at least 500 and $12,000 minimum in earnings, as long as you’ve been in business for at least 6 months.

The Bottom Line

A MCA might be a good option if your car wash customers typically pay you with debit and credit cards and you can’t wait long for capital.

3. Credibly: Best for Equipment Financing

Credibly is a Michigan-based online lender that provides equipment financing. If you need to buy equipment like washing systems, chemicals, dryers, vacuums, and brushes, you’ll find its equipment loan valuable. Once you take one out, you can repay it over the working life of your asset.

Pros
Simple application process: You can apply online quickly, in about 10 minutes..
Long repayment terms: Since repayment terms extend over the life of your equipment, you can take your time paying back your loan.
Bad credit accepted: Credibly’s qualification requirements are lenient so you may get approved with bad credit.
Cons
Higher interest rates: Compared to other lenders, Credibly’s interest rates for pharmacy loans are higher than average.
Fees: You may have to pay other fees in addition to interest, like origination fees.

Credibly doesn’t disclose its credit score, annual revenue, and minimum time in business requirements for its equipment loans. However, it does state you can repay your loan over the working life of your equipment.

The Bottom Line

For an equipment loan that’s easy to get, consider Credibly’s product. It can provide you with the funds you need to pay for your car wash equipment so you can get your venture up and running.

Try Credibly

4. BlueVine: Best for Business Line of Credit

BlueVine is a financial technology company with lines of credit. With a line of credit, you may pull funds whenever you’d like up to your set credit limit, which is based on your credit and other factors. If you don’t know exactly how much capital you need for your car wash or wish to combat cash flow shortages, it might make sense.

Pros
Flexible requirements: You might get approved for a BlueVine line of credit with a low credit score.
Competitive rates: Depending on your credit, you may lock in a competitive interest rate.
Fast funding: Upon approval, you can begin to withdraw funds immediately.
Cons
Limited availability: BlueVine is not available in every state.
Short repayment terms: Since terms are between 6 to 12 months, your payment may be high.

Lines of credit from BlueVine range from $5,000 to $250,000 with a starting APR of 4.8%. BlueVine eligibility criteria includes a minimum credit score of 600, at least $120,000 in annual revenue, and a business history of six months or more.

The Bottom Line

If you’d like a flexible form of car wash financing, a BlueVine line of credit is a smart option, especially if you have solid credit and can secure a low interest rate.

Try BlueVine

5. Torro: Best for Start-Up Capital Loan

Torro is a lender that supports small businesses and entrepreneurs. If you’re ready to launch a car wash, its start-up capital loan should be on your radar. You can use it to fund a variety of startup expenses, such as equipment, inventory, payroll, marketing, permitting, and insurance. This product is designed for businesses that have been around for less than six months.

Pros
Many Options: Torro can connect you to hundreds of financing options so you can find the right one for your unique situation.
Flexible: You may use a Torro startup loan to pay for any expenses that will help you to open your car wash.
Fast Process:There is no paperwork or business appraisals so you may get your funds the same day you apply.
Cons
Potentially Higher Fees: Since start-up capital loans are risky to lenders, you may have to accept a high interest rate.
Good Credit: In most cases, you’ll need good to excellent credit to get approved for a Torro start-up capital loan.

Torro’s start-up capital loans cap out at $100,000 and feature terms between 12 and 48 months as well as maximum APRs of 36%. To qualify, you’ll need a minimum credit score of 700 and a maximum revenue of $5,000 per month.

The Bottom Line

If you dream of owning a car wash, a Torro start-up capital loan can provide you with the funding you need to make it a reality.

Try Torro

Best Car Wash Loan Options - Features Comparisons

Company

Min. Credit Score

Min. Time in Business

Min. Annual Revenue

Loan Amount

Interest Rate

Biz2Credit

660

18 months

$250,000

$250,000 to $6 million

Starting at 10%

Fora Financial

500

6 months

$12,000

$5,000 to $500,000

Not disclosed

Credibly

Not disclosed

Not disclosed

Not disclosed

Not disclosed

Not disclosed

BlueVine

600

6 months

$120,000

$5,000 to $250,000

Starting at 4.8%

Torro

700

Not disclosed

Maximum revenue of $5,0000 per month

Up to $100,000

Maximum of 36%


Best Car Wash Equipment Leasing Options

There’s no denying car wash equipment is expensive. If you don’t want to purchase outright, you may want to consider equipment leasing. Equipment leasing is when you rent equipment for a specific period of time. Once your leasing contract comes to an end, you can return the equipment, renew the lease, or purchase it.

Leasing car wash equipment might make sense if you’re short on cash as most lessors don’t require a large down payment. It can also make it easier for you to update your equipment so that you’re always using the latest and greatest washing systems, dryers, and blowers. Also, depending on the lease, you may be able to deduct your payments as a business expense and save on taxes.

Crestmont Capital is one company that offers leasing for car washes. There are no upfront costs as well as flexible term lengths and repayment options. You can apply for a lease for free without any impact to your credit. Deferred payment plans are also available.

Mid Continent Capital, Inc. is another option. Its lease terms range from 12 to 60 months and can give you affordable access to top-notch car wash equipment, including conveyors, vacuums, operating software, and more.

Other Types of Car Wash Financing

In addition to small business loans, you may want to consider these car wash financing options:

  • Crowdfunding: You can use crowdfunding to connect to potential investors who believe in your car wash venture and are willing to lend you money. Under the debt crowdfunding model, investors act as individual lenders and will require you to repay them via monthly installments. Equity crowdfunding gives investors shares of your company in exchange for their investments.
  • Friends and Family: If you have friends and family that would like to help you fund your car wash venture, treat their contribution like a traditional loan. Provide them with detailed information on what you’ll do with their funds and how you intended to pay them back. Make sure everything is in writing so that everyone is on the same page and there is no confusion.
  • Grants: Grants are ideal because you don’t have to pay them back. However, applying for them is usually a long, time-consuming process. The U.S. Small Business Administration (SBA) is one federal organization that offers grants to small businesses run by women, veterans, and minorities. You may also want to check with the Chamber of Commerce and explore grant options in your local area.

What are the costs of running a car wash business?

If you have plans to start a car wash business from scratch, you’ll need to acquire about 7,000 square feet of land, which may range from $100,000 to $200,000 or even more, depending on the location.

Once you have the land, you’ll need to invest in construction and landscaping, which may run you anywhere between $550,000 to $800,000. This figure will go up if you have to tear down any structures that already exist.

Other expenses you’ll have right off the bat include equipment, a waste management system, licenses and permits, marketing, and insurance. When you add everything up, you’ll find that a car wash business will cost you around a million dollars. In addition, you’ll have ongoing expenses like water, electricity supplies, maintenance, and payroll which can vary greatly.

How Can You Use a Car Wash Business Loan?

A car wash loan is versatile, meaning you can use it to cover just about any business-related expense, including:

  • Property: With a car wash loan, you may receive the significant capital you need to acquire land and transform it into a car wash that will attract potential customers in the local area.
  • Equipment: The type of car wash you decide to open will determine what equipment you might finance. At a minimum, however, you should expect to purchase washing systems, chemicals, dryers, blowers, brushes, towels, a water system, and a payment processing system.
  • Marketing: To succeed in the car wash industry, you’ll need to promote your offerings. You can use a car wash loan to pay for a website, signage, social media ads, and other tools that will support your overall marketing strategy.
  • Payroll: If you have a manual car wash, you’ll need employees to wash vehicles. Even if you go the full-service route, employees will be required to maintain equipment and address customer service issues. A car wash loan can help you cover the costs of payroll.

How to Qualify for Car Wash Financing?

These tips can increase your chances of securing car wash loans.

  • Build Credit: Your credit score shows lenders whether you’re responsible with money and able to pay your bills on time. If you’re a car wash startup, do your best to build credit. To do so, you may want to open a business credit card and repay your balance in full every time.
  • Consider Secured Car Wash Loans: Secured loans that involve collateral or something valuable you own are less risky and therefore easier to qualify for. You may want to look for secured options if you’re having trouble getting approved for unsecured loans. Just keep in mind that if you default on a secured loan, the lender may seize your asset.
  • Write a Compelling Business Plan: Your business plan will inform lenders about your car wash and what you plan to do with the loan proceeds. Before you submit your plan with your application, make sure it’s well written and professional.
  • Choose the Right Lender: Car wash loans are not created equal. That’s why it’s in your best interest to shop around and choose a lender with criteria that you meet. Our list of the best car wash loans above is a great starting point.

Types of loans available for Car Wash Businesses

There are a variety of car wash loans available, including:

  • SBA Loans: SBA loans are partially guaranteed by the SBA. While they’re difficult to qualify for, they offer large amounts and lengthy repayment terms of up to 25 years. Several popular SBA loans include the Standard 7(a) Loan, 7(a) Small Loan, Export Loan, SBA Express Loan, Veterans Advantage Loan, and CAPLine Loan.
  • Microloans: For a smaller loan of up to $50,000 a microloan is worth exploring, especially if you can’t qualify for traditional loans. Microloans are usually offered by mission-based nonprofits and government organizations such as the USDA and SBA.
  • Commercial Real Estate Loans: If you need to buy land or property to run your car wash a commercial mortgage is useful. You can also use a commercial mortgage to renovate an existing car wash.
  • Equipment Financing: Equipment financing is specifically intended to pay for new or used equipment. The equipment itself will serve as collateral for your loan so you’ll likely get approved, even with bad credit.
  • Invoice Factoring: Invoice factoring is when you sell your invoices for immediate cash. Usually, a factoring company will invoice you 85% to 90% of your unpaid invoices. Once they collect payment from your customers, you’ll receive the remaining balance minus the factoring fee.
  • Merchant Cash Advances (MCAs): A merchant cash advance (MCA) might be a good option if your customers pay you through debit and credit cards. You’ll receive the cash upfront and pay it back with a percentage of your sales plus any fees.
  • Business Credit Cards: Business credit cards can help you cover daily expenses. Most of them come with rewards like cash back, airline points, gift cards, and merchandise. If you pay them in full every month, credit cards may be very beneficial to your car wash.

Conclusion

As long as you’re willing to put in the work, a car wash business may be very profitable. Through car wash financing, you can cover all of your expenses and grow your venture. Just make sure you choose the right loans for your situation and repay them according to your agreements. Best of luck with your venture!

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About the Author

Anna Baluch

Freelance Copywriter

Freelance copywriter who enjoys writing for large publications as well as startups, small to medium sized businesses. Anna Baluch is a personal finance writer with over 7 years of experience covering topics related to mortgages, debt management, student loans, personal loans, and more.

More about me