If you are looking for a car wash loan, you may be wondering why these are so hard to come by. There are many reasons for this situation, mainly because it is difficult to get started with commercial construction financing.
Oh, this is a start-up business. Banks do not like to give loans to start-ups. There is no historical financial information on the website. Lenders are unwilling to provide money to companies that do not have financial reports. Compared to the new company, you are more likely to borrow money from the old company, which is reasonable.
Second, many banks face cost overruns. If you are looking for a high-value loan and the costs are overloaded then the bank will be higher than the initial loan. Many banks have just stopped lending and are still incomplete. Since there is no business income, only personal debts that they can repay, they cannot repay loans. There are many unfinished projects waiting to be completed.
Third, check the specific convenience features. When they go into a shielding state, when you have specific facilities of use, they tend to wear off faster. If a bank lends money in a residential or office building and fails before finding a new buyer, the bank may hire a management company. In general, investment properties, such as apartment buildings or office buildings, are more valuable than special properties, such as car washes, if they are seized and auctioned.
When applying for a car wash construction loan, if you already have an existing site, it will be easier to get a loan than without a car wash. It’s harder to get credit than never owning or washing a car. It is true that operating other types of shops (such as hotels or restaurants) to wash the car is not that difficult, but it still needs to be addressed. If you are not going to actively run a car wash company, you will definitely want to hire a manager with expertise.
If you don’t currently own the property, it will be more difficult to set up a car wash compared to someone who already owns the land. If you have acquired the land and the seller supports you in financing the property, it will be more difficult than someone who owns a free and clear property. If you don’t choose the house you want to buy, it will be more difficult to get money. If you don’t have a plan to develop a car wash and you don’t have the management or ownership expertise of the company, getting a car wash loan will be very difficult, but not impossible.
If you have previously applied for a permit from the municipality, you are more likely to be approved than someone who has just started applying. This should be obvious because the lender has less work and less time to complete the work. This is very important.
This doesn’t mean that just because there’s a car wash within 10 miles, it’s a good place for car washes. If you don’t have a feasibility study, it may be necessary. The lender wants to know if this is a viable area to develop the business.
If you have bought land in recent years and the value of the land has increased, the lender can only credit you with the initial purchase price. Suppose you bought this plot of land two years ago for $300,000, and now the value of $500,000 is estimated to be only $300,000.
Consumers generally do not consider soft costs such as closing costs, inventory, working capital, and overspending to obtain loans. If you are looking for high-quality credit and do not accept these additional costs, you may be refused a loan because the value of the credit is too high. Depending on the type of financing you want to obtain (SBA or regular), the maximum loan amount can be between 70%-85%.
Remember all these questions you are looking for when financing a car wash. If you find that you don’t have enough equity, or you feel you don’t have enough industry expertise, you may want to research working with someone in that company. If you join someone who has more money or knowledge in the field, you will find that your chances are greatly increased.
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