Car Wash Industry Loans
Since the beginning of the creation of automobiles, there has been a demand to clean them. In 1914, the first man powered car wash was created, and with the evolution of technology and innovation, we now have self-serve and automated car washes throughout the United States. The car washing industry is actually a great and successful industry to be in right now, especially with gas prices being so low. The lower gas prices are, the more cars on the road getting dirty! Add in the fact that there are more people in the country today than ever before, and most of them driving, the car washing industry is booming. In 2016, the car washing industry generated about $15 billion in annual revenue with over 80,000 full service, roll-over, and self-service car washing businesses throughout North America. Since 1994, the percentage of people using a car washing service to clean their car has gone from 47 percent to 72 percent in 2014. Today, American’s are constantly living fast paced lifestyles that do not accommodate washing their cars at home; plus, the economy is finally rebounding from the recession, allowing many consumers to have extra disposable income, contributing to the booming car wash industry.
Even though the car wash industry is doing better than most industries, and is expected to stay that way for years to come, there are still issues being faced by many car washing businesses. The biggest issue that is changing the car washing industry is the development of local and federal regulations. Sustainability and chemical free workplaces have become a huge demand for American’s everywhere, leading to constantly changing laws that vary state to state for car washing businesses. In addition to regulations shifting the way business is done, many car washing businesses are struggling to adopt vital technologies and software’s to improve business for both the customer and the business owner. The car wash industry is currently in a great state, but if business owners are not staying on top of vital trends and business practices that are changing every industry today, there will be consequences.
Loan Uses for Car Wash Businesses
- Technology: This is one of the most vital components to any business in the United States today. The amount of innovative technological products being created and produced has completely revolutionized the way business is done in every single industry. For car wash businesses in particular, there are a variety of essential technological processes needed to maximize efficiency and increase customer satisfaction. In a time when most of the population is dependent on technology and is demanding quick, easy, and simple processes for businesses, this has become a necessity. Car wash businesses everywhere need to be updating point of sale and payment systems for all types of car washes – especially self-serve car wash stations. Also, implementing better cloud based products and the Internet of Things into daily operations can help alleviate tedious tasks. There are so many different financing options to help improve a car wash business through technology.
- Inventory: Car wash businesses are lucky when it comes to inventory, because most of the inventory needed for a car wash company does not spoil. With that being said, inventory is still an essential component to running a successful car washing business. Being able to stock up before peak seasons is essential. There are also a variety of technology based systems that can help with inventory management to make sure that there is enough of a certain product to maximize profits. Considering the multitude of funding choices to help make this possible is always important.
- Expansion and Renovations: In the car washing industry today, the market is filled with small mom and pop car washes; the car washing industry is highly fragmented, allowing plenty of room for successful businesses to consider expanding. While the idea of expansion and renovations is incredibly exciting for many successful car washing businesses, it is very expensive – and with anything, there is always room for unexpected situations to arise. Remembering that there are always loan options to help make this dream a reality can help.
- Marketing, Advertising, and Social Media: For every single industry today, marketing and advertising is more important than ever before. Consumers today rely on third party reviews and sources to decide where to take their business, while being aware of great deals. Through social media in particular, many car washing businesses are able to connect with consumers everywhere while building their online presence. There are a variety of free ways to handle online marketing and social media, but for the best results, most successful businesses resort to hiring a marketing firm or an in-house employee to handle this vital aspect of business. .
- Online Presence and Mobile: Just as marketing, advertising, and social media is important to reach consumers, building a strong online and mobile presence goes hand in hand. Through content marketing, a strong social media presence, and mobile apps and websites, car washing businesses are able to engage more with their customers while meeting their needs. Consumers today want to be able to access any piece of information about a business instantaneously, which is why this component has become vital in running any successful business. Most business owners today are struggling to understanding the best ways to build this presence, which is why there are a variety of funding and loan options to help bring someone on board to help with this.
- Regulations: Going green, sustainability, and ecofriendly products are on every consumer’s mind today, and the government is taking notice. Depending on the state that the car wash business is in, there are rules and requirements to comply with. For example, in California, car washes are required to reuse at least 50 percent of their water, while Wisconsin has water quality restrictions for reusing water. However, regulations are rapidly changing and can often lead to expensive costs to comply with these laws. Remembering that there are quick financing and cash advance options available to help during these times is essential.
- Payroll and Hiring New Employees: Hiring new employees and covering payroll costs is essential in most car washing businesses – and consumers want to know that they are receiving the best customer service possible. Thanks to the internet, negative reviews are incredibly easy to write and come by when researching which car wash to take business to. This is why investing the appropriate time and money into a quality workforce is vital for any customer service based industry. Surprisingly, hiring new employees and maintaining payroll can become quite expensive, especially during slow business periods. Cutting payroll costs to meet other financial business needs should never be an option, but if times are tough, there are financing possibilities to help with this.
- Equipment: Having quality equipment is a major necessity for car washing businesses everywhere – but unfortunately, equipment breaks, and it is never cheap to replace or repair. This is why equipment financing is so important in an industry dependent on quality equipment. Through equipment financing, car washing businesses can purchase essential equipment needed to keep business going without paying the full costs up front.
Types of Car Wash Loans
| Types | Rates | Terms | Funding |
|---|---|---|---|
| Bank | 6-10% | 3-7 years | 14-30 days |
| SBA | 6-10% | 3-7 years | 10-30 days |
| Line of Credit | 5-15% | 1 – 3 years | 7-30 days |
| Alternative | 6-25% | 1-5 years | 5-7 days |
| Cash Advance | 1.16-1.55 | 3-24 months | 1-3 days |
Car Wash Bank Loans
Car wash loans offered by traditional banks, small banks, community banks and credit unions. Car wash financing options include term loans, lines of credit and equipment leasing. Rates start at around 5% and terms can last up to 25 years depending upon use.
Car Wash SBA Loans
A form of conventional financing with an enhancement by the SBA that covers most of the lender’s losses should the car wash fail to fully-repay their loans. Rates start at 6% and terms can range from 3-25 years.
Alternative Car Wash Financing
Alternative lending relates to any amortizing loan that is provided by non-bank lenders. Alternative loans are faster funding than bank loans and have much less credit requirement. With that having been said, alternative funding options have higher rates and shorter terms than bank loans.
Car Wash Cash Advance
Cash advances are the sale of the car wash’s future revenue at a discount to the lender. While a cash advance may be very expensive, they are easy to qualify for and fund quickly.
