How To Purchase And Close An Existing Car Wash Permanent Loan
First, you will use the financial history of the wash to determine what size loan the wash will support. Second, you will determine the credit worthiness of the purchaser and their ability to qualify for the loan.
What loan amount will the car wash support:
The seller will make current financials plus year end financials for the previous year available to the lender so they can underwrite the value of the wash.
- Seller will provide the past three years’ tax returns for the car wash to the lender for further analysis
- The lender’s underwriter will determine, using the above financials, the cash amount remaining after operations to support the max debt. Most lenders use a ratio of 1.25 debt coverage. With the above information, the max loan amount will simply be determined by a mathematical formula.
- SBA-Capital.com will qualify your car wash using the above information at no charge or obligation allowing you to pass this information on to your potential purchaser.
Qualify the car wash purchase:
- Purchaser will complete and execute the lender’s loan application for their review and approval
- Provide the past three years’ personal tax returns to the lender
- Lenders underwriter, using the above information, can approve the purchaser, subject to the appraisal
Prepare to close:
- Lender will open title and instruct the title company to prepare for closing the loan in approximately 3 to 4 weeks
- The lender will order an appraisal and an environmental report for the car wash which typically takes about three weeks
- The transaction can close soon as the environmental and appraisal are received
- The closing of a typical loan as described above takes approximately six weeks from start to closing.
Additional features SBA-Capital.com makes available to the Purchaser:
- Start up working capital will be included your loan
- Your closing cost will be included in the loan
- SBA fees are included in the loan
- If you would like to invest $500 K renovating and updating the car wash, SBA-Capital will create a $500 K PIP loan.
- The original loan will close to pay off the seller and the $500 K PIP loan is escrowed with your lender. The lender will pay the vendors as the improvements are completed