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Car Wash Financing: Best Business Loans and Lines of Credit 2023

A car wash business requires investments in the location, equipment, and marketing that will allow you to stand out from the crowd. A car wash loan or line of credit can help you pay for these expenses so you can maximize your profits and grow your business.

Best Car Wash Financing Options
Anna Baluch
Written by:Anna Baluch
Freelance Copywriter

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

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The car wash industry accounts for about $5.8 billion dollars each year, with more than 8 million vehicles using a car wash each day. Despite these figures, it can be a challenge to obtain the capital you need to operate a car wash.

To start and operate a car wash, you’ll need to pay for inventory and equipment, permits and licenses, advertising fees, payroll for employees, utility bills, and more. There are a variety of car wash business financing solutions to help you meet your goals. Below, we’re sharing the best small business loans for car wash from top lenders.

Car Wash Financing: Best Business Loans and Lines of Credit 2022

Top Picks for Best Car Wash Financing Options

Before making a commitment, it’s best to compare car wash loans to find the one that’s best for your individual car wash business

In this review, we highlight the terms, rates and fees of each lender, and explain what makes each them a good choice. We also share potential downsides of each company, and provide a rating methodology you can use to select the best car wash financing option for your needs.

 

Best Car Wash Financing Options - Full Overview

Best Overall
Lendzi logo
4.5

Lendzi - Best Car Wash Businesses With High Revenue

4.5
Factor Rate
Starting at 1.10
Loan Amounts
Up to $4 million
Min. Annual Revenue
$180,000
Key Features
  • Borrow up to $4 million in working capital
  • Min. credit score: at least 500
  • Min. time in business: 6 months
  • Equipment financing up to $2 million
  • Business line of credit up to $250,000
  • See your options without hurting your credit
  • Flexible terms: 3 to 15 months
  • Excellent customer reviews on independent review sites
  • Get funding in as little as 24 hours
Pros & Cons
  • Excellent customer satisfaction
  • Bad credit accepted
  • Multiple lending and loan options
  • Fast funding times
  • Flexible terms
  • Income requirement may be high
  • Multiple phone calls required after application process
Overview

Lendzi caters to those with high revenue that have been denied a loan elsewhere. Founded in 2020, Lendzi is both a direct lender and a lending marketplace with more than 75 lenders in its network. This increases your odds substantially at getting a loan. The company also has 2,000 5-star reviews from satisfied customers on sites like Google, TrustPilot, and Better Business Bureau.

Main Features
Lendzi offers seven different types of car wash loans, including short- and long-term loans, merchant cash advances, equipment financing, business lines of credit, working capital loans, and SBA loans. Working capital loans require the lowest minimum credit score at just 500. These loans max out at $400,000 and terms range between 3 and 15 months. Equipment financing also has a low credit score requirement at just 550, and this type of loan goes up to $2 million. To apply, start by filling out the online application. It takes just a few minutes and will not impact your credit score. Shortly after submitting, a Lendzi representative will reach out to discuss your business further. Your representative will guide you on the types of loans you qualify for, what your payment will look like, and what additional documentation may be required. Once approved, funds can be in your account in as little as 24 hours. To qualify, Lendzi recommends a business history of six months and an annual revenue of at least $180,000.

Because Lendzi works with high revenue borrowers that have been denied a loan elsewhere, they are our top pick for car wash loans with high revenue. The lender also offers competitive rates, multiple loan options, and has excellent customer satisfaction ratings from past and current borrowers.
Backd business loans
4.5

Backd - Best for Cheapest Interest Rates

4.5
Factor Rate
Starting at 1.10
Loan Amounts
Up to $2 million
Min. Annual Revenue
$200,000
Key Features
  • Borrow up to $2 million
  • Min. Credit Score: 640
  • Min. Time in Business: 2 years
  • Industry best factor rate for MCA - as low as 1.10
  • APR for the Line of credit product starts at 35%
  • Flexible repayment terms up to 16 months
  • Get funding in as little as 24 hours
  • Check your rate with a soft credit pull
Pros & Cons
  • Fast lending decision and funding times
  • Flexible payment options
  • Large loan amounts
  • No collateral required
  • Must be in business at least one year
  • Rates and fees are not disclosed prior to applying
Overview

If you’re thinking of opening a second car wash location and need the funding to do so, Backd may be the solution you need. Founded in 2018, Backd offers small businesses working capital loans up to $2 million. The online application takes just a few minutes to fill out and a lending decision is given almost instantly. 

 

Main Features
Backd offers working capital loans and business lines of credit to borrowers who may not qualify with traditional banks and lenders. Working capital loans range from $10,000 to $2 million with terms up to 16 months. Payments are made daily, weekly, or semi-monthly. Business lines of credit range from $10,000 to $750,000 with unlimited terms. Neither option requires collateral, and funds can be in your account within 24-48 hours of loan approval. To qualify, you need to be in business for at least two years, have $200,000 or more in annual revenue, and 640+ FICO score. You also need to be based in the U.S. and have a business bank account.

Backd is the ideal lender for car wash businesses looking for large loan amounts. Funds can be used to expand your business, upgrade equipment, or pay for other business expenses. As long as you’ve been in operation for one year or more, Backd is worth taking the time to apply.
nationalfunding
4.1

National Funding - Best for Car Wash Equipment Financing

4.1
Factor Rate
Starting at 1.10
Loan Amounts
Up to $500K
Min. Annual Revenue
$250,000
Key Features
  • Min. Time in Business: 6 months
  • Min. Credit Score 600
  • Borrow up to $500,000 in working capital
  • Equipment financing up to $150,000
  • Factor rate From 1.10
  • Fast funding
  • Early payment discounts
  • Equipment financing repayment 2-5 years
  • Working capital repayment 4 months - 2 years
Pros & Cons
  • Fast funding
  • Early repayment discount
  • Solid reviews and reputation
  • Daily or weekly repayments
  • Expensive rates and fees
  • Lack of transparency
Overview

A short term working capital loan from National Funding can help keep your car wash running smoothly. You can receive up to $500,000 in funding to pay for everyday expenses like equipment, rent, payroll, insurance, and taxes. Keep in mind that you’ll need to repay your loan on a daily or weekly basis.

 

Main Features
National Funding’s short-term working capital business loans can be anywhere from $5,000 to $500,000 with repayment terms ranging from four months to two years. The pay rate starts at 1.10. The requirements for a working capital loan include minimum credit score of 600, a business track record of at least six months, and $250,000 or more in annual revenue.

If you’re an established car wash with sufficient revenue, a working capital loan from National Funding can be a great way to cover operational costs and manage gaps in cash flow when you’re slow. While you can borrow up to $500,000, you’ll need to repay your loan every day or week.
biz2credit review
4

Biz2Credit - Best for Commercial Real Estate Loan

4
Interest rates
Starting at 7.99%
Loan Amounts
$25K to $500K
Min. Annual Revenue
$250,000
Key Features
  • Working capital up to $2 million
  • Term loans up to $500,000
  • Term loan interest rate starts at 7.99%
  • Loan Repayment 12-36 months terms
  • Variable APR depending on the applicant
  • Funding in 72 hours
  • Soft credit pull
Pros & Cons
  • High borrowing limits
  • Quick application
  • Fast funding times
  • Strict eligibility criteria
  • Extra fees charged
Overview

Biz2Credit offers commercial real estate loans for commercial properties, including car washes. You can think of a commercial real estate loan as a mortgage for your car wash. Whether you’d like to purchase an existing car wash or start from scratch, you may get approved for up to $6 million in funding.

 

Main Features
Biz2Credit’s commercial real estate loans range from $250,000 to $6 million with terms between 12 and 36 months. Interest rates start at 10% and are largely based on your credit score. Here are 8 ways you can build your business credit. To qualify, you need a credit score of at least 660, at least $250,000 in annual revenue, and a business track record of 18 months or more. Due to the high requirements needed for approval, a car wash commercial real estate loan may work best for car wash businesses looking to expand their business rather than those looking to start their business.

If you have good credit, high revenue, and have been in business for some time, a Biz2Credit commercial real estate loan can provide you with ample capital for a car wash property.
bluevine
4

Bluevine - Best for Business Line of Credit

4
Interest rates
Starting at 6.2%
Loan Amounts
Up to $250K
Min. Annual Revenue
$480,000
Key Features
  • Funding up to $250,000
  • Min. credit score: 625
  • Min. time in business: 6 months
  • Interest rates as low as 4.8%
  • Loan Repayment 6-12 months terms
  • Quick and simple application
Pros & Cons
  • Flexible requirements
  • Competitive rates
  • Fast funding times
  • Not available in every state
  • Short repayment terms
Overview

Bluevine is a financial technology company offering small business lines of credit. With a line of credit, you may pull funds whenever you’d like up to your set credit limit, which is based on your credit score and other factors. If you don’t know exactly how much capital you need for your car wash or wish to combat cash flow shortages, a line of credit might make sense.  

 

Main Features
Lines of credit from Bluevine range from $5,000 to $250,000 with a starting rate of 4.8%. Payments are made monthly or weekly over six or 12 months. The application is streamlined, and you could receive a funding decision in as little as five minutes. Once approved, funds can be in your account in as fast as 24 hours. Bluevine eligibility criteria includes a minimum credit score of 625, at least $10,000 in monthly revenue, and a business history of six months or more.

If you’d like a flexible form of car wash financing, a Bluevine line of credit is a smart option, especially if you have a solid credit history and can secure a low interest rate.
SMB Compass
4.5

SMB Compass - Best Variety of Car Wash Loans

4.5
Interest Rates
Starting at 7.99%
Loan Amounts
$10K - $10 million
Min. Monthly Revenue
$20,000
Key Features
  • Loans up to $10 million
  • Min. credit score: can go as low as 550 for certain loans
  • Min. time in business: 1+ years in business, no startups
  • Funding times: 5 to 7 days for term loans and 24 - 48 hours for line of credit
  • Flexible terms: 2 – 10 years for term loans
  • Interest Rates: starting at 8.99% for term loans
  • Applying does not impact credit score
  • Nine loan products to choose from
Pros & Cons
  • Low, competitive rates
  • Large loan amounts
  • Loan terms up to 25 years
  • Excellent customer service
  • Poor credit not accepted
  • Not available in all states
  • Must be in business at least one year
  • High revenue requirements
Overview

If you run a car wash business but aren’t sure what type of business loan you need, SMB Compass may be able to help. The lender offers nine types of business loans for car washes, including lines of credit, term loans, SBA loans, equipment financing, asset-based loans, and more. Running a car wash business can be expensive, and sometimes having extra cash on hand can provide you with new opportunities to increase your revenue. Qualifying for SMB Compass is a bit stricter, but the lender offers competitive rates, flexible terms, and high loan limits. The lender expects to see credit scores above 650, one year of business history or more, and at least $20,000 per month in revenue.

Main Features

SMB Compass offers nine different types of small business loans to borrowers. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.

SMB Compass is ideal for car wash businesses that aren’t sure of the exact loan product they need. Customer service is superior and representatives can walk you through the process and help you choose the best loan for your business. Applying takes just a few minutes and, if approved, funds can be in your account within one to two business days. SMB Compass is ideal for borrowers with decent credit and high monthly revenues. Contact them today to get started!
fora financial logo reviewed on Finimpact.com
4

providerName

4
Min. Monthly Revenue
$12,000
Min. Time in Business
6 months
Min. Credit Score
550+
Key Features
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Pros & Cons
  • Leninant requirements
  • Quick application
  • Fast funding times
  • Rates might be high
  • Additional fees may apply
Overview

Fora Financial is a fintech lender with a variety of loan products, including merchant cash advances (MCAs). With a MCA, you’ll receive a lump sum of money in exchange for a percentage of the future debit and credit card sales you earn from your car wash customers. You can enjoy fast cash and flexible repayment terms. 
 

Main Features

With a Fora Financial MCA, you can borrow anywhere from $5,000 to $750,000 and make monthly repayments. There are no set repayment terms and no restrictions on how you use your money. Fora also offers approval within 24 hours of applying and early payoff discounts for those that pay their loan off early.

To qualify for a Fora merchant cash advance, you need a credit score of at least 500 and $12,000 minimum in earnings. Your car wash business also needs to have been in operation for at least six months.

A merchant cash advance from Fora Financial might be a good option if your car wash customers typically pay you with debit and credit cards and you can’t wait long for capital.

Main Features of The Best Car Wash Financing Options

Lendzi4.5
Backd4.5
National Funding4.1
Biz2Credit4
Bluevine4
SMB Compass4.5
Fora Financial4
  • Min. Credit Score - 500
  • Min. Time in Business - 6 months
  • Min. Annual Revenue - $180,000
  • Loan Amount - Up to $400,000
  • Interest Rate - Factor rates starting at 1.15

How to Choose the Best Car Wash Financing Option

  • Loan Features: As a car wash owner, large loan amounts, lengthy terms, and flexible repayment terms are ideal. In some cases, however, smaller, short-term loans might come in handy.
  • Application process: When it comes to applying for a car wash loan, chances are you’d like to do so online, from the comfort of your own home or office with minimal documentation. We looked for straightforward applications with quick decision and funding times.
  • Interest rates and fees: The lower the interest rate and less fees you have to pay, the more you’ll save on financing your car wash. A competitive rate can result in hundreds or even thousands of dollars in savings. 
  • Qualification process: If you’re a startup car wash, you’ll want a loan with lenient minimum credit score, annual revenue, and business history requirements.
  • Customer support: Depending on the lender, you can receive answers to your questions and assistance with your application via phone, email, online chat, or website features like loan calculators and FAQ pages.  
  • Online user reviews: Ratings and reviews from independent, third-party sites like Trustpilot and Better Business Bureau (BBB) can help you choose reputable lenders for your car wash loans.
  • Perks and Bonuses: Extras like hardship assistance and free credit score monitoring can make any car wash loan more appealing.

 

What Are the Costs of Running a Car Wash Business?

If you have plans to start a car wash business from scratch, you’ll need to acquire about 7,000 square feet of land, which may range from $100,000 to $200,000 or even more, depending on the location.

Once you have the land, you’ll need to invest in construction and landscaping, which could cost up to $800,000. This figure will go up even higher if you have to tear down any structures that already exist.

Other expenses you’ll have include equipment, a waste management system, licenses and permits, marketing, and insurance. When you add everything up, you’ll find that a car wash business will cost you around a million dollars. In addition, you’ll have ongoing expenses like water, electricity supplies, maintenance, and payroll which can vary greatly.

While the costs can be expensive, the average car wash business makes $100,000 per year for self-service car washes and up to $900,000 per year for a full-service business.

How Can You Use a Car Wash Business Loan

A car wash loan is versatile, meaning you can use it to cover just about any business-related expense, including:

  • Property: With a car wash loan, you may receive the significant capital you need to acquire land and transform it into a car wash that will attract potential customers in the local area.
  • Equipment: The type of car wash you decide to open will determine what equipment you might finance. At a minimum, however, you should expect to purchase washing systems, chemicals, dryers, blowers, brushes, towels, a water system, and a payment processing system.
  • Marketing: To succeed in the car wash industry, you’ll need to promote your offerings. You can use a car wash loan to pay for a website, signage, social media ads, and other tools that will support your overall marketing strategy.
  • Payroll: If you have a manual car wash, you’ll need employees to wash vehicles. Even if you go the full-service route, employees will be required to maintain equipment and address customer service issues. A car wash loan can help you cover the costs of payroll.

 

Types of Loans Available for Car Wash Businesses

There are a variety of car wash loans available, including:

  • SBA Loans: SBA loans are partially guaranteed by the Small Business Administration. While they’re difficult to qualify for, they offer large amounts and lengthy repayment terms of up to 25 years. Several popular SBA loans include the Standard 7(a) Loan, 7(a) Small Loan, Export Loan, SBA Express Loan, Veterans Advantage Loan, and CAPLine Loan.
  • Microloans:For a smaller loan of up to $50,000, a microloan is worth exploring. Microloans are usually offered by mission-based nonprofits and government organizations such as the USDA and SBA.
  • Commercial Real Estate Loans: If you need to buy land or property to run your car wash, a commercial real estate loan is useful. You can also use a commercial mortgage to renovate an existing car wash.
  • Equipment Financing: Equipment financing is specifically intended to pay for new or used equipment. The equipment itself will serve as collateral for your loan, so you’ll likely get approved, even with bad credit.
  • Invoice Factoring: Invoice factoring is when you sell your invoices for immediate cash. Usually, a factoring company will invoice you 85% to 90% of your unpaid invoices. Once they collect payment from your customers, you’ll receive the remaining balance minus the factoring fee.
  • Merchant Cash Advances (MCAs): merchant cash advance (MCA) might be a good option if your customers pay you through debit and credit cards. You’ll receive the cash upfront and pay it back with a percentage of your sales plus any fees.
  • Business Credit Cards: Business credit cards can help you cover daily expenses. Most of them come with rewards like cash back, airline points, gift cards, and merchandise. If you pay them in full every month, credit cards may be very beneficial to your car wash business.

 

Other Types of Car Wash Financing

In addition to small business loans, you may want to consider these car wash financing options:

  • Crowdfunding: You can use crowdfunding to connect to potential investors who believe in your car wash venture and are willing to lend you money. Under the debt crowdfunding model, investors act as individual lenders and will require you to repay them via monthly installments. Equity crowdfunding gives investors shares of your company in exchange for their investments.
  • Friends and family: If you have friends and family that would like to help you fund your car wash venture, treat their contribution like a traditional loan. Provide them with detailed information on what you’ll do with their funds and how you intended to pay them back. Make sure everything is in writing so that everyone is on the same page and there is no confusion.
  • Grants: Small business grants are ideal because you don’t have to pay them back. However, applying for them is usually a long, time-consuming process. The U.S. Small Business Administration (SBA) is one federal organization that offers grants to small businesses run by women, veterans, and minorities. You may also want to check with the Chamber of Commerce and explore grant options in your local area.
  • Equipment Leasing: Equipment leasing is when you rent equipment for a specific period of time. Once your leasing contract comes to an end, you can return the equipment, renew the lease, or purchase it.

 

Car Wash Equipment Leasing Options

Leasing car wash equipment might make sense if you’re short on cash as most lessors don’t require a large down payment. It can also make it easier for you to update your equipment so that you’re always using the latest and greatest washing systems, dryers, and blowers. Also, depending on the lease, you may be able to deduct your payments as a business expense and save on taxes.

Crestmont Capital is one company that offers leasing for car washes. There are no upfront costs and the company offers flexible term lengths and repayment options. You can apply for a lease for free without any impact to your credit. Deferred payment plans are also available.

Mid Continent Capital, Inc. is another option for equipment leasing. Its lease terms range from 12 to 60 months and can give you affordable access to top-notch car wash equipment, including conveyors, vacuums, operating software, and more.

 

How to Qualify for Car Wash Financing

Tips that can increase your chances of securing car wash loans include:

  • Build Credit: Your credit score shows lenders whether you’re responsible with money and able to pay your bills on time. If you’re a car wash startup, do your best to build credit. To do so, you may want to open a business credit card and repay your balance in full every time.
  • Consider Secured Car Wash Loans: Secured loans that involve collateral or something valuable you own are less risky and therefore easier to qualify for. You may want to look for secured options if you’re having trouble getting approved for unsecured loans. Just keep in mind that if you default on a secured loan, the lender may seize your asset.
  • Write a Compelling Business Plan: Your business plan will inform lenders about your car wash and what you plan to do with the loan proceeds. Before you submit your plan with your application, make sure it’s well-written and professional.
  • Choose the Right Lender: Car wash loans are not created equal. That’s why it’s in your best interest to shop around and choose a car wash lender with criteria that you meet. Our list of the best car wash loans above is a great starting point.

 

Conclusion

Car wash loans and lines of credit can provide your car wash business with the funds it needs to purchase equipment, pay employee salaries, and expand your business. As long as you’re willing to put in the work, a car wash business can be a profitable business that you can hold on to long-term. Make sure to do your research and choose the right car wash loan product to meet your business financing needs.

 

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

About the Author

Anna Baluch

Written by: Anna Baluch

Freelance Copywriter

Freelance copywriter who enjoys writing for large publications as well as startups, small to medium sized businesses. Anna Baluch is a personal finance writer with over 7 years of experience covering topics related to mortgages, debt management, student loans, personal loans, and more.

More about me
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me

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