loans for financing carwash commercial properties are available at terms and
low interest rates
that afford the owner to enjoy a good cash flow and monthly income stream.
Trying to secure carwash financing loans can be
very challenging without the right representation. It can also be very easy if you
have the right packager that knows your business and can present your request so
that a lender wants to say "yes". These very profitable
business can be a part time operation for coin operated, no attendant facilities or
can be a
fulltime responsibility at least for the full service locations. Repairs, utilities, maintenance,
water reclamation, advertising, supplies, insurance and other factors are
important to consider in running a carwash. Financing mortgage loans can be a large expense as well.
Types of financing loans for a carwash can vary
also depending on the type.
A very important key component in making an underwriting evaluation to approve a
request for financing carwash loans is the debt service coverage ratio
(DSCR). The DSCR is defined as the monthly debt payments in comparison to the net monthly income
of the subject commercial property. Using a DSCR of 1:1.10 underwriters say
that they want to see a $1.10 in net income for each $1.00 monthly mortgage
payment. The higher the DSCR is the more conservative the lender and the more
difficult qualifying can be. Most of them will not go below a
1:1 ratio (a dollar of debt payment per dollar of income generated). Anything
less then a 1:1 ratio will result in a negative cash flow situation making for a
very high risk for the lender and the borrower. DSCR's are set by property type.
The vehicle cleanliness industry is
basically divided into 3 types of facilities.
- Also known as "wand style". We've all done it. Put your coins in and
hand spray clean your vehicle yourself. Here the automobile owner sprays
down his own vehicle with a pre-soak solution, soap and rinse. Simple.
As the facility owner,
you offer the space and cleaning equipment, the operator of the vehicle handles the labor
involved in the cleaning process. The quality of the cleaning job on the vehicle depends totally on
the person using the equipment. This type of facility
is generally not attended or at best is minimally attended or checked on
periodically. It does, however, require
regular re-supplying, maintenance and janitorial work.
- Also referred to as Full Service facilities. Interior / exterior or
flexible service are offered in this type facility. A conveyor facility is
attended full time by a manager and cleaning staff. The number of staff
required depends on the extent of the services you offer. In this case, the vehicle
is placed on a conveyor track that pulls the vehicle through a series of
pre-soak and soap
applicators, rinses and dryers. On exterior only service, the vehicle owner
may remain in the vehicle. For Full Service, the owner leaves the vehicle, and you,
the facility owner, provides the labor to clean and detail the interior and
exterior of the vehicle. There are usually lots of
retail automotive products on display in the lobby area which can
tremendously to the bottom line profits.
Automated Cash, Debit or Credit Card Machine
- Often called a pass-over or rollover
machine. The equipment may be touch free or it may be a brush-style unit
that relies on soft foam or fiber brushes to actually make contact with and
clean the vehicle. This facility offers in-bay or automatic exterior
only vehicle cleaning while the automobile operator remains in the vehicle. Here the vehicle pulls up to by a push button
box where a
code is entered or cash or credit or debit card is inserted and payment is made. The
vehicle operator selects
the type of wash and enters. At gas stations sites, the
transaction may take place at the pump where a code is issued while
transacting the gasoline purchase.
Loans for carwash financing are considered good investments by commercial
lenders. Americans still carry on a love affair with their automobiles and will
continue to have their vehicles be a visual display of their status and
character. We all know that on Saturday morning there will be a long line at the
carwash. Loans for financing these enterprises are a great investment for
lenders and other private funding sources.
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