The benefits of the SBA 504 loan for all carwash businesses
The carwash industry has been experiencing significant growth, driven by increasing vehicle ownership and the demand for convenient, professional cleaning services. As urban lifestyles become more fast-paced, the need for efficient and reliable carwashes continues to rise. This presents a tremendous opportunity for carwash owners and auto detailers to expand their operations and grow their businesses.
The Small Business Administration’s (SBA) 504 program offers an ideal commercial real estate financing option for auto industry professionals to purchase, renovate, construct or refinance their facilities.
Owning your carwash facility not only stabilizes occupancy costs, but it also allows for greater customization to meet customer needs. However, transitioning from leasing to owning can seem daunting for some entrepreneurs. This is where the SBA 504 loan comes into play, offering small business owners a unique financing program that makes property ownership achievable and affordable.
Why choose the SBA 504 loan program?
As mentioned, the SBA 504 program is an affordable financing option that allows carwash owners and auto detailers to purchase, construct, renovate or refinance their facilities. The SBA 504 loan can also be used to buy eligible business equipment. The best part is the terms are more attractive than what conventional financing offers.
Some of the key advantages of the SBA 504 include:
- Low down payment: Pay as little as 15% of the total project cost, allowing business owners to conserve working capital.
- Extended repayment terms: Choose between 10, 20 and 25 years.
- Below-market interest rate: A fixed-rate loan fully amortized over 25 years means your monthly payment stays the same and there is no balloon payment at the end of the term.
- No limit to total project cost: You can think big and even take out multiple loans.
- No additional collateral required: The only collateral required is the subject property.
- Versatility of funds: Use funds to purchase land or buildings, construct and expand existing property, purchase equipment, and even refinance commercial mortgages with cash out.
- Supportive loan team: Carwash professionals who utilize the SBA 504 program get ongoing support from a certified development company (CDC). The CDC guides business owners through the loan process, helps with the paperwork and application, and is a partner through the life of the loan.
- Green energy incentives: Projects incorporating green energy solutions, such as solar panels or energy-efficient equipment, may qualify for higher loan amounts and additional incentives.
SBA 504 loan carwash success story
White Mountain Car Wash, LLC (Splash & Dash Car Wash & Express Fuels), located in Arizona, recently leveraged the SBA 504 program to acquire three different self-serve carwash facilities with multiple loans. The family of owners, including the Allisons, Godeks and Muellers, secured approximately $3.4 million in total project financing with only a 15% down payment requirement. This strategic move allowed them to expand their operations and stabilize their occupancy costs for the long term.
Mr. Allison shares, “The SBA 504 loan program was a game-changer for us. With the low down payment and favorable terms, we were able to expand our business and improve our services without overstretching our finances. The support and guidance we received was invaluable throughout the process.”
Get started by prequalifying for an SBA 504 loan
One of the best aspects about the SBA 504 loan is that most private, for-profit businesses in the U.S. qualify. If you are ready to see your carwash or auto detail business expand, don’t hesitate to get prequalified. Owning your facility is far more advantageous than leasing and the SBA 504 loan is specifically designed to make property ownership a reality.
Founded in 1981, TMC Financing is the leading provider of SBA 504 commercial real estate loans in the nation, funding projects worth over $14 billion across Arizona, California, Nevada, Hawaii and Oregon. Over 7,000 businesses have benefited from this financing, resulting in the creation of an estimated 60,000 jobs. Contact TMC Financing today to learn more about how the SBA 504 program can help your business thrive.