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If you are looking to buy or build a standalone car wash, here are some things to consider. First of all, 65% of all car wash facilities are at gas stations and convenience stores. Approximately 25% of all petroleum sites have one and most oil companies now will not build a new store without a car wash. The majority of them are the rollover type washes that you either receive a free wash or a reduced price wash after a fill up of your fuel.
When referring to building or buying or refinancing a car wash, for all intents and purposes, we are referring to tunnel washes, whether they are full service or exterior tunnel washes. There are approximately 20,000 tunnel washes in the country. The obvious difference would be the average labor costs at an exterior car wash compared to a full service facility. The average "full service" car wash has 14 employees as opposed to an exterior car wash that averages four employees. The full service usually enjoys higher revenues and obvious higher labor costs. At the full service tunnel washes, you can also have auto detailing that usually has very good profit margins. The average tunnel wash costs $2,000,000 to build (excluding land costs) so you need to be generating good revenues to service the debt on this.
Many of the "rollover" or "In-bay Automatic" auto washes are at gas stations and convenience stores, although you do see isolated standalone rollover car washes. More In-Bay/Rollover car washes exist than tunnel wash and self-serve washes combined
Many of the tunnel washes are being done SBA 504 and SBA 7(a). The reasons for this are obvious. SBA usually offers a higher advance and frequently will finance working capital and inventory that offset the lower origination and lower rate of conventional financing. It is hard to argue with the fixed rates available with a SBA 504 loan. If you add soft costs to your project it makes it difficult to beat.
From a financing point of view, many of the same criteria apply to financing (existing or ground-up construction) of a auto wash facility. If you are well capitalized and have sufficient equity into the transaction, have industry experience, have acceptable credit and the site cash flows or the potential site has a market there, your chances are good that you will obtain financing. As with all loans, PACKAGING IS HALF THE BATTLE. A good business plan with realistic projections and accurate assumptions will go a long way. Underwriters do not like to have to figure things out. They like to have it laid out in a well thought out presentation. The fewer questions an underwriter has, the more likely your deal will be approved.
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