Top Lenders for Car Wash Loans

  find me a Car Wash lender

Last annual update: Jan 25, 2023

There are only a dozen or so banks in America that are the leaders in car wash financing. These lenders really understand the intricacies of SBA car wash loans and we recommend you contact them first to get a clean, quick deal!


Typical car wash business financing terms

Loan term: 25 years

Interest rate: 5 – 5.75%

Minimum annual cash flow: 9% of loan amount


In 2021, the US car wash service market size was valued at over $14 billion and analysts expect it to grow at a compound annual growth rate of 4.8% through 2028. Research has also shown that consumers increasingly prefer washing their cars by themselves. That explains the uptick in car wash financing requests for self-service car washes.

It’s estimated that there are more than 100,000 car wash facilities in the United States with new locations rapidly opening up across the country, both in-bay automatic and self-service. If you’re looking to enter this business, definitely take advantage of SBA car wash loans to get your business up and running with minimum collateral.


Benefits of owning a Car Wash business

There are several reasons why a car wash can be a lucrative business. Entrepreneurs who are just starting appreciate the fact that there are no big players in the car wash industry that have a market share greater than 5%. There’s also an enduring need for the service. People will always need to get their cars cleaned and when they can’t do it themselves, they’ll head to a car wash.

Depending on the type of car wash business you set up, your presence at the location may not even be required. Most self-service car washes only provide the necessary equipment that people need to wash their cars and they’re happy to pay for it. This makes car washes a great business to set up for passive income.


How to get money to buy a car wash

Conventional loans are difficult to get if you’re looking for car wash financing. That’s because banks have strict approval requirements and if customers can’t meet them, they can’t get a loan. Car washes are viewed as single-purpose properties as they can’t easily be converted to another use.

That’s one of the main reasons why banks consider these businesses as high risk and tend to be hesitant in lending to them. Even if they do decide to provide car wash loans, the terms will likely require significant down payment, higher interest rates and possibly even a balloon payment requirement.

SBA loans for buying a car wash

The various loan programs of the Small Business Administration are perfect if you’re looking for money to buy a car wash. The SBA is a government agency but it’s not directly lending to business owners. It guarantees a significant chunk of the loan and the SBA’s partners lend the money. Their risk is reduced as even in the case of a default, a big portion of the loan is guaranteed by the government. Borrowers are also required to put less cash or equity down to qualify.

You can obtain an SBA loan from banks, credit unions and other conventional lending institutions. The SBA 7(a) and SBA 504 loans are the most common car wash loans that business owners opt for. Both have distinct purposes but will cover nearly all of the car wash’s needs, from buying land and equipment to construction and working capital.


SBA 7(a) loan for buying a car wash

First-time lenders generally opt for the SBA 7(a) loan to buy a car wash. The funds can be used for buying land and constructing a new car wash from the ground up or purchasing and renovating an existing business.

Any of the costs related to the construction can be covered by the loan, including but not limited to water pumps and hydraulics, conveyors, dryers, and other equipment. Funds from the SBA 7(a) loan can also be used to refinance an existing loan.

A maximum of $5 million can be borrowed through an SBA 7(a) loan for a car wash. The repayment period can be between up to 25 years with interest rates ranging from 5 – 5.75%. You can always shop around for rates from different lenders.


SBA 504 loan for buying a car wash

The SBA 504 loan is also an effective solution for a car wash loan. It’s meant to provide financing for specific fixed assets that may include land, property renovations, and machinery. The SBA 504 loans can’t be utilized for working capital, operational expenses, refinancing debt, advertising or marketing.

The 504 loan provides long-term, fixed-rate financing for up to $5 million. Your business needs to have a tangible net worth of less than $15 million and an average net income of less than $5 million after federal income taxes to be eligible for a 504 loan.

The SBA 504 loan interest rates are lower compared to SBA 7(a) loans with both 10 and 20-year repayment terms offered.


SBA 504 Green Loan Program

If you qualify for an SBA 504 loan, you may also be eligible for multiple SBA 2nd mortgages through the Green Loan program provided that your business meets a few conditions. Car washes are inherently environmentally friendly as washing a car in your driveway consumes up to 140 gallons of water while a car wash only uses up to 40 gallons of water.

Through this program, you can get a second mortgage of up to $5.5 million at below-market, fixed-interest rates on a per-project basis, but only if you buy or construct a building that uses 10% less energy than what you’re currently using.

You can take several steps to make these improvements such as recycling water, using solar power for energy and heating water as well as upgrading to more energy-efficient lighting.

How to apply for an SBA car wash loan

We help connect you to the best car wash lenders in the industry. Here are just a few of the top banks, credit unions and other financial institutions that are actively approving SBA loans for car washes. We also help connect you to SBA Preferred Lenders that are committed to quickly approving SBA loans for small businesses.

For example, for a SBA car wash loan of $1,000,000, the car wash will need to generate at least $90,000 in annual profits (revenues – expenses) to cover the loan payments.

To help you further search for car wash lenders, here’s the complete list of top lenders actively doing SBA loans for car washes:

RankBankCityState# of LoansAvg Loan $Avg Interest
1Celtic BankSalt Lake CityUT19$2,653,0326.3%
2Metro City BankDoravilleGA8$4,266,2504.9%
3The Huntington National BankColumbusOH8$215,0006.6%
4U.S. BankCincinnatiOH8$22,2505.9%
5Stearns BankSaint CloudMN7$2,020,3866.9%
6Patriot BankStamfordCT5$3,646,6006.9%
7TD BankWilmingtonDE5$52,4009.4%

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