Term Loan Keeping It Clean
Author: Stephanie Clarke
Date posted: 04.19.23

In high school and college, Mark worked part-time at a lucrative car washing business. On graduation from university, he opened his first car washing business in his hometown, a busy metropolitan area. His company offered interior cleaning, a specialized automatic exterior wash and wax, as well as hand wipe down and detailing for each customer. Customers choose the level of service and part of the appeal is that the company records customer preferences for a more personalized experience. Recently business has been so good, Mark wants to add an additional automatic exterior wash and wax bay to meet customer demand. The expansion will require additional cash fast to ensure operations continue smoothly and customers remain satisfied.

The cost of an additional bay is high but Mark feels with the right financing and his ever-increasing stream of customers he will quickly be able to repay the loan. Since he will be essentially doubling his car washing potential, he’ll need more employees as well. With his stellar reputation in the community for offering premium quality services at a reasonable rate, Mark begins to price the addition of the new bay. Thankfully, the property he had purchased for the original business had ample space to add an additional bay.

After pricing specialty automated car wash and wax bays, Mark felt he had found the best one for his business, priced at $465,000. With his needs carefully laid out, Mark began his search for a lender who could meet his loan requirements with a reasonable interest rate and term. His business had grown quickly, and he was ready with an exceptional credit score and credit history, plus well-organized financials for each year he had been in business. He had a term loan of less than 10 years in mind, given his belief he could pay it off earlier given the demand for quality car washes by individuals and local dealerships.

Mark found a lender who offered an eight-year term for the $465,000. Mark believed he could pay it off sooner, but the length of the term gave him a bit of breathing room in case it didn’t go as he hoped and planned. With his loan secured, Mark negotiated the purchase and had the new bay installed over a six month time period while keeping the existing bay and his business operational throughout the construction.

After six-months of operation, Mark’s business had nearly doubled as he anticipated and at the end of seven years, he was able to pay off his term loan a year early.

About The Author | Stephanie Clarke

Stephanie has a bachelor's degree in psychology and has been a professional writer for over 15 years. Her client list includes New York Times bestselling authors, publishing houses, prominent public figures and successful business owners. She resides with her family in Florida.

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