Finimpact
Updated on

Car Wash Financing: Best Business Loans and Lines of Credit 2022

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 loan or line of credit can help you pay for these expenses so you can maximize your profits and grow your business.

Best Car Wash Financing Options
Anna Baluch
Freelance Copywriter

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

icon

Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.

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.

To start a car wash, you’ll need much more than soap and water, regardless of if you go with a hand car wash or an automatic car wash. You’ll need to pay for inventory and equipment, permits and licenses, advertising fees, payroll for employees, utility bills, and more.

Luckily, there are a variety of car wash business financing solutions to help you meet your goals. Below, we’re sharing the best car wash loans and lines of credit from top online car wash lenders.

Our Top Picks for Best Car Wash Financing

kabbage
  • No prepayment penalties and no origination fees
  • Easy application process
  • Monthly fee : 2-9% for 6 month loans, 7.5-18% for 12-month loans, 15.75-27% for 18-month loans
Min. Credit Score
Min. Credit Score 640
Loan Amount
Loan Amount $2K-$250K
Loan Repayment
Loan Repayment Up to 18 months
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
fora financial logo reviewed on Finimpact.com
  • 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

How to Choose the Best Car Wash Business Financing

Before making a commitment, it’s best to compare car wash loans to find the one that’s best for your individual car wash business. While ranking the best small business loans for a car wash, our experts focused on the following 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. We looked for straightforward applications with quick decision and funding times.
  • 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: Extras 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. Kabbage: Best for Fair Monthly Revenues

Many car wash lenders require $10,000 or more in monthly revenue, making it difficult for those with lower monthly revenues to quality. Kabbage, backed by American Express, offers car wash lines of credit to businesses with fair, or decent, monthly revenues.

Pros
Straightforward application process
No prepayment penalties
Flexible term lengths
Fair monthly revenue requirements
Cons
Fees can be high
Personal guarantee required
Not available for startups

Kabbage offers car wash lines of credit ranging from $2,000 to $250,000. Terms are six, 12, or 18 months and interest rates vary depending on the term. Six-month loans range from 2-9%, 12-month loans range from 7.5-18%, and 18-month loans range from 15.75-27%. Each time you draw on your line, you’ll choose a term, pay it back within that term, and then use the funds again if you choose.

To qualify for a line of credit from Kabbage, you need to have a minimum credit score of 640 and be in business for at least 12 months. Monthly revenue requirements are $3,000, making this car wash lender a top pick for car wash businesses with average profit margins.

The Bottom Line

A line of credit from Kabbage is ideal if you’ve been in business for at least one year and do not yet have high profit margins. You can apply online in just minutes and receive a funding decision in real-time.

Try Kabbage

2. Biz2Credit: Best for Commercial Real Estate Loan

Biz2Credit

Biz2Credit offers commercial real estate loans for commercial properties, including 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
Quick application
Fast funding times
Cons
Strict eligibility criteria
Extra fees charged

Biz2Credit’s commercial real estate loans range from $250,000 to $6 million with terms between 12 and 36 months. Interest rates start at 10% and are largely based on your credit score. Here are 8 ways you can build your business credit.

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. Due to the high requirements needed for approval, a car wash commercial real estate loan may work best for car wash businesses looking to expand their business rather than those looking to start their business.

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

3. Fora Financial: Best for Car Wash Merchant Cash Advance

Fora Financial

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
Quick application
Fast funding times
Cons
Rates might be high
Additional fees may apply

With a Fora Financial MCA, you can borrow anywhere from $5,000 to $750,000 and make monthly repayments. There are no set repayment terms and no restrictions on how you use your money. Fora also offers approval within 24 hours of applying and early payoff discounts for those that pay their loan off early.

To qualify for a Fora merchant cash advance, you need a credit score of at least 500 and $12,000 minimum in earnings. Your car wash business also needs to have been in operation for at least six months.

The Bottom Line

A merchant cash advance from Fora Financial 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.

4. Bluevine: Best for Business Line of Credit

BlueVine

Bluevine is a financial technology company offering small business 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 score 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, a line of credit might make sense.  

Pros
Flexible requirements
Competitive rates
Fast funding times
Cons
Not available in every state
Short repayment terms

Lines of credit from Bluevine range from $5,000 to $250,000 with a starting rate of 4.8%. Payments are made monthly or weekly over six or 12 months. The application is streamlined, and you could receive a funding decision in as little as five minutes. Once approved, funds can be in your account in as fast as 24 hours.

Bluevine eligibility criteria includes a minimum credit score of 625, at least $10,000 in monthly 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 a solid credit history and can secure a low interest rate.

Try BlueVine

5. Torro: Best for Startup Car Wash Small Business Loan

Torro

Torro is a lender that supports small businesses and entrepreneurs. If you’re ready to launch a car wash, its startup 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 loan options
Easy online application
Same day funding as loan approval
Cons
Potentially higher fees: Since start-up capital loans are risky to lenders, you may have to accept a high interest rate.
Good credit required for startup loans

Torro offers startup capital loans up to $125,000  with terms ranging from 12 to 48 months. Maximum APRs are 36%, and the initial application takes just a few minutes to fill out. 

To qualify, you’ll need a minimum credit score of 700 for a startup loan and a maximum revenue of $5,000 per month. Time in business isn’t as important, as Torro looks at a multitude of factors when assessing your application.


 

The Bottom Line

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

Try Torro

6. Credibly: Best for Car Wash Equipment Financing

Credibly

Credibly is a Michigan-based online lender that provides car wash 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
Long repayment terms
Bad credit accepted
Cons
Higher interest rates
Origination fees charged

Credibly is both a direct lender and a loan marketplace. Because of this, the company does not 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. 

Credibly also offers SBA loans for car wash businesses. An SBA loan is backed by the Small Business Administration and, because of this, the rates are typically much lower than you’ll see elsewhere. Term lengths can also be longer, however, the qualifications are much more stringent. 

The Bottom Line

For a car wash 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. And if you don’t want an equipment loan, Credibly offers a multitude of other products, including working capital loans and car wash SBA loans.

Try Credibly

Best Car Wash Financing Options - Main Features

CompanyMin. Credit ScoreMin. Time in BusinessMin. RevenueLoan AmountInterest Rate
Kabbage64012 months$3,000 per month$2,000-$250,0006-month loans: 2-9% 
12-month loans: 7.5-18% 
18-month loans: 15.75-27%
Biz2Credit66018 months$250,000$250,000 to $6 millionStarting at 10%
Fora Financial5006 months$12,000 per month$5,000 to $750,000Not disclosed
Credibly5606 months$50,000Based on equipment valueNot disclosed
Bluevine6256 months$120,000$5,000 to $250,000Starting at 4.8%
Torro700 for startup loansNot disclosedMaximum revenue of $5,000 per monthUp to $125,000Maximum of 36%

 

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 could cost up to $800,000. This figure will go up even higher if you have to tear down any structures that already exist.

Other expenses you’ll have 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.

While the costs can be expensive, theaverage car wash business makes $100,000 per year for self-service car washes and up to $900,000 per year for a full-service business.

 

How You Can 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.

 

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 Small Business Administration. 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. 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 real estate loan 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): 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 business.

 

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: Small business 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.
  • 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.

 

Car Wash Equipment Leasing Options

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 and the company offers 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 for equipment leasing. 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.

 

How to Qualify for Car Wash Financing

Tips that can increase your chances of securing car wash loans include:

  • 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 car wash lender with criteria that you meet. Our list of the best car wash loans above is a great starting point.

 

Conclusion

Car wash loans and lines of credit can provide your car wash business with the funds it needs to purchase equipment, pay employee salaries, and expand your business. As long as you’re willing to put in the work, a car wash business can be a profitable business that you can hold on to long-term. Make sure to do your research and choose the right car wash loan product to meet your business financing needs.

About the Author

Anna Baluch

Written by: 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
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me

Related Loan Picks