A Tunnel Express Car Wash typically 
cost $3 to $4 M depending on the land cost. Consequently, the investor needs extensive information and proven mathematical formulas to be assured they are making the correct decision. Investors will find the following five tools helpful as they analyze the value of their potential investment. These strategies will apply to Ground up construction or an Existing car wash.
Car Wash Ground Up Construction
Experienced Car Wash Lender – An experienced loan officer will meet with the investor in the very beginning, at no cost to the investor, to develop a “Big Picture Business Plan.” The loan officer will provide a complete loan analysis to avoid any future surprise or disappointment.
The lender, based on experience and working with the investor, can determine the approximate cost of the car wash. With this information, the lender can quickly pre-qualify the borrow, provide all the loan cost, including monthly payments, and the amount of cash equity down payment. The lender will also provide different options to the investor that will allow them to reduce the amount of cash down payment by monetizing other assets. Additional car wash lending information, including how to reduce the required equity, is available at https://sba-capital.com.
Your lender will develop a schedule for the investor describing all the events that will occur from day one until the Investor starts washing cars. Once the investor supplies their financial information, the lender will have a tentative approval within one week. The formal approval will not be available until the Appraisal and Environmental study has been completed.
Experienced car wash Realtor – becomes an important part of your team as you search for a car wash location. Experienced Realtors know the best sites available and will not waste your time on the property that is so overpriced it will never appraise by the lender. Likewise, they will not waste your time looking at property that appears to be under-priced but does not meet the requirements for a profitable car wash location.
Car Wash Realtors will also have a good idea if the city will issue a permit for your Car Wash. The zoning may allow a car wash, which is a good starting point, but a lot of work remains with the Distributor, Architect, Engineer, City staff, P&Z, and ultimately the City Council. With the Realtor coordinating the work required by all six groups the odds of receiving a permit for the car wash improve significantly. It typically takes three to six months to secure a permit, depending on the requirements and delays imposed by the respective City.
Experienced Realtors are typically aware if other nearby car wash sites have been purchased. The site you are considering may be great for one car wash but may not have the demographics to support more than one. Bottom line, an experienced car wash Realtor does much more for you than negotiate the land purchase contract; they become part of your car wash team.
Experienced Distributor – is a very important member of the team before, during, and after your car wash has been completed. Soon as the Realtor locates a potential site, the Distributor visits the property and does an in-depth “market analysis” that includes a traffic study, demographics, accessibility, the speed limit of cars passing the site, and much more. The Distributor also completes an “invaluable proforma” for the borrower and lender consisting of many variables including all cost to operate the car wash, expected revenue, and net profit in total dollars and ROI for a five-year period.
The Distributor provides cost numbers to the Investor and lender at the beginning. The lender develops a complete loan package for the review and approval of the investor. The loan package includes the acquisition of the land, the construction cost of the car wash, plus all the financial cost associated with the Ioan. One of the largest distributors in the country is Big Man Washes (www.bigmanwashes.com) know in the industry as “The Complete Car Wash Company.” You will find helpful vendor information on their site including Sonny’s Factory https://www.sonnysdirect.com/ the world’s largest manufacturer of car wash equipment.
FIVE PROVEN ANALYTICAL TOOLS
- Experienced Team: Investor should select an experienced Lender, Realtor, and Distributor of Manufacture Equipment with a proven success
- Demographic and Traffic Study: Your Distributor will conduct an extensive Demographic and Traffic study as part of their service at no charge to the investor. If the results of the study are average or less, eliminate this site and look elsewhere.
- Financial Proforma: The Distributor will also do a proforma showing the cash flow of the car wash. This study will be an instrumental part of the lender’s loan request package.
- Debt service ratio: Your Lender will do a CRITICAL DEBT COVERAGE RATIO based on all the information at their disposal. Example, assume the borrower invest 20% equity as cash down payment, cash flow must show a minimum debt service ratio of 1.25%. If the ratio falls below 1.25%, the loan is not approved. Very helpful tool to prevent the lender and investor from investing in a car wash that will not perform up to expected financial standards.
- Reduce equity by Monetizing assets: Using your equity in other assets you can reduce the required equity up to 50% freeing up cash for other business opportunities. The Blog on our website https://sba-capital.com provides extensive information on how to monetize assets and raise equity including how to use cash from your IRA without incurring any penalties.
SBA was founded to help the local business person and create jobs in the U.S. The program has exceeded all expectation creating hundreds of thousands of jobs each year and total annual loans typical exceed 30 Billion dollars annually. Our objective at SBA-Capital is to make it possible for our borrowers to select and obtain the best possible loan for their financial and wealth planning.
Looking for ways to earn capital for your car wash while still maintaining 100% of the company?. Hershel Pierce founding director of Pavillion Bank and owner of SBA Capital has been a lender since 1982. He is an EXPERT at navigating the Small Business Administration’s (SBA) requirements, which, although necessary to secure an SBA loan, can be difficult. Raising money to fund your venture is a rite of passage for most entrepreneurs, the barrier to entry into opening a business often equity and how to raise it. In this article Hershel shares his tips to raise the equity while keeping 100% of your company. Read more here