Financing for a closed wash needing new equipment

[mcwashes]

I've been eyeing this wash thats has 5 SS and 1 IBA and vacs. I'm getting closer on the building and land costs with the seller and we're now getting to the point of financing. The place has been closed for several years and needs a full overhaul. I've had bids from WW coming in around $450k for all new SS and a new IBA with all new pumps and the land is about the same price point.

Because the place has been closed, there are no financials so I'm wondering what advice you have for financing a project like this. Any contacts for bridge lenders in this space would be helpful, or any type of financing that would help get the place up and running again.

Thanks

 

[mcwashes]

Well, I'll give an update here in case anyone ever searches financing. I spoke with several lenders - community bank, bridge guys, and others. Options are:

1. SBA loan. Longer closing timeline required. 10-20% down and competitive rates. Full qualification. I believe this was a step down pre pay.

2. Community bank. Pretty standard terms for car wash and other types of loans they do. 75-85% LTC ( depending on credit). Full qualification with 3 yr tax returns personal and entity. Typically need loan committee approval and check on their meeting schedule to know when you will get thumbs up or donw on the project. Current rates are 7-8% depending on borrower and deal. 1/2 pt origination. No pre-pay

3. Bridge: 10-14% rates. Project based so don't need to provide my financials. Borrower background is important to show track record and project details need to show ability to repay. 80% LTC and a little higher if you want. 3%origination. No prepay. Can close in a few weeks.

Perhaps this will help someone else in the future

 

[Rfreeman]

$900K ($450K land + $450K for equipment).....for a closed down wash.....yikes! I'm sure it beats building from the ground up but still yikes, that's a lot of debt for no income history in my opinion. I have restored 2 closed down washes but on both cases I asked around until I got some quality feed back about how busy the washes were. One of them I found the previous owner and he shared the financials he had the other I spoke with multiple previous customers and 1 vendor that verified when open the wash was busy, but on both cases I bough used equipment and saved thousands. For example, a 4 bay system for $8K vs. $40K from JC (I'm guess because I don't have a quote only been told a guesstimate of what they cost new). Both washes have worked out nicely for me since opening and revenue has increased year over year so far for the last 3 and 5 years.

If I was looking at that wash, I would look at getting the self serve open first to 'test" customer response before going into the deep end with new ss and IBA.

keep us posted.

 

[soonermajic]

Rfreedman knows his stuff. He doesn't buy washes, he steals them! LOL

Id be scared to death of spending $900k & no financials. But heck, I spent $700k on a wash that was closed down for 12 years... so I guess I'm lyin.
Mine has slowly,but surely, gotten busier. You will need a good distributor to help you out a bunch! I gotta use mine fairly often...