SBA Loan Car Wash Business Expands
Author: Valerie Mellema
Date posted: 08.20.23

In a medium-sized city in a Midwestern state, two friends decided to open a car wash. It seemed like a great idea at first. After all, cars are huge in the United States, and not everyone wants to wash their vehicles at home. Moreover, as with other automotive-related businesses, car washes have seen decent growth so there seemed to be nothing that could go wrong. The duo was right. A new car wash was a great addition to the city, and it made a decent amount of money.

The Need for Funding for a New Car Wash Location

While things were going well at the current location, the car wash owners realized they were missing out on opportunities in other parts of the city. So they put their heads together and considered their options. They could stick with what they were doing or take a risk and see if they could expand their car wash business. It was a great option to get into a lucrative market, and it wasn’t likely to add much work to their existing responsibilities.

Overall, the owners would need around $600,000. Fortunately, they had half of that available in savings from the current business. Still, financing $300,000 isn’t always the most straightforward process. The owners knew that they needed to consider all their options before moving forward to ensure the success of the new car wash.

 

Car Wash Business Expands

Selecting an SBA 7(A) Loan

Before going forward with any financing, the owners decided to look into all the loan options available. They considered traditional loans as well as any SBA loans they would be eligible for. However, most of the conventional loans had higher interest rates or other issues that made them less appealing. In the end, the SBA 7(a) loan was what the friends chose. A 7(a) loan is often used to fund working capital, equipment and supplies purchases, business expansions, and real estate.

 

 

Why Choose this Specific Financing Option

There were a lot of reasons that the owners decided to choose an SBA loan. However, when it came down to it, it was a matter of the loan being the right amount, with a low-interest rate and a reasonable payback term. Also, they had a great accountant that would be able to help with all of the required documentation.

The State of the Company Since

It took some time for the owners to start the new car wash, but it happened thanks to the SBA loan they chose. Since then, the car wash has been completed and more revenue is coming in every day.

Car Wash Business Expands
About The Author | Valerie Mellema

Valerie has over 16 years of experience as a professional writer of blogs, eBooks, articles and press releases, with a focus on finance and alternative lending. Valerie resides with her family in Texas and is passionate about her horses.

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