Published: November, 2018
When you are planning on starting a small business or expanding an existing business, there is one concern that outpaces all others: Financing. Without the right financing, at the right terms, it is almost impossible to get the quality of real estate you need to establish or grow your business. This applies in particular to car wash facilities, which have very specific, expansive funding requirements.
Fortunately, there are a number of good ways to get funding for your small business, especially when you partner with a trusted lender.
Discover three ways for financing a car wash facility and find out why you should seek funding from a strong community bank specializing in SBA lending.
Bank Financing
One of the most common ways small business start-ups fund their venture is through traditional bank financing. However, bank financing often comes with very strict requirements that some small business owners find difficult to meet. For example, bank financing often requires that you possess 25% of your building costs in cash before they will give you the other 75%.
This does not even cover the operating capital needed to run a car wash which can be anywhere from $25,000 to $200,000 depending on the type of car wash you are operating. Unless you are confident in your ability to meet these requirements, you should be wary of traditional bank financing.
Investment Financing
Another possibility for financing a car wash is by seeking private investors. Constructing a group of private investors can be a great way to finance your business, provided you know what you are getting into starting out.
When you finance your car wash through investment, you will most likely have to guarantee a substantial return on investment, which can be difficult when you are just starting out.
Additionally, many investors may want a say in how your business operates, a situation that can be extremely taxing. However, if your investors are comprised of people you trust intrinsically, this can be an excellent way to get the funding you need for your new car wash facility.
SBA Loan for Small Business
Many people are not aware of this, but one of the best ways to fund any small business venture, including the purchasing or construction of a new car wash facility, is a loan backed by the U.S. Small Business Administration.
SBA loans are great for a number of reasons, most of which are centered around convenience. Firstly, SBA has fewer requirements that need to be met before the loan is granted. Secondly, the terms of the loan itself are often more beneficial, particularly when it comes to interests.
Finally, getting an SBA loan through a trusted community lender means having someone on your side who cares about the success of your business.
When you are planning to open a new car wash facility, you need to get the right funding through the right lender. The best way of financing a car wash facility is an SBA loan, and the best way to get an SBA loan is by partnering with Fidelity Bank SBA Lending.