Where did you get your business loan?

[Roz]

When I got into the business purchasing a 30 year old place that requires fixing up I spent several months visiting and speaking with 18-20 owners of current car washes similar to the one I own or the model I want to turn it into. What I like about the car wash industry is that owners have been terrific sharing info, ideas that have worked and not worked, and just opening up their back equipment rooms to me to learn from them - they have helped me up the learning curve in a short period of time. I am far from an expert but the knowledge gained allowed me to review the 10 different automatic machines available on the market and feel that I came to a wise, informed purchase decision. Very different than some of the other businesses and industries I have operated in where everyone looks at you as competition. Travel 10 miles from your ground and visit a few places, most will share info with you - also join your local car wash association and attend a few meetings. Then find a good car wash installer/service person you can trust to not just sell you more equipment than you need but will help you solve problems in a cost effective manner (ideally teaching you along the way so you do not need to call them every time something goes sideways).

Then visit your closest competition to see what they charge for their packages as you might be able to charge more than $10 for some of your packages - and double check your $3 cost projection as touch-free use about 70 gals per car and if water/sewer costs are 1-3 cents per gal, well you might want to check the $3 number.

One owner I met, with 2 touch-free washes and a few SS bays, has 5 FT employees (including him) just to keep the place looking cleaning and working smoothly.....and he has a killer location too...

 

[Tjmcnich]

So much great info, thanks everyone! A lot of research to be done before I can dive into anything though. I'd be lucky to have my first customer by Summer 2019 but we will see. Basically all the chips need to fall perfectly. Seems like getting the loans will be the biggest struggle. Still gotta make sure the lot I want will get approval from the city before anything can even start to begin, otherwise its back to the drawing board. I know I could get approved for a mortgage now for the land but then I still gotta get a loan for 700-800k for the construction and equipment. might be better off trying to get 2 or 3 different loans? is that even possible? I figured since I have a good paying city job + a proven online ecommerce business a loan would be a slam dunk. Guessed wrong.

 

[robert roman]

"...2 touch-free washes and a few SS bays, has 5 FT employees (including him) just to keep the place looking cleaning and working smoothly...."

Where's this gem located?

 

[Earl Weiss]

You gotta understand the Chicago Market. My location would see 30-40k cars drive past everyday. Even in the middle of the night its still a very very heavily traveled street. I also have zero competition on the street im looking to buy on. No car wash within at least 8 miles south and no car wash north of me within 15 miles.

I understand the Chicago market and with no competition for those distances and with that traffic I am surprised there are not any tunnels - yet.

 

[Tjmcnich]

I understand the Chicago market and with no competition for those distances and with that traffic I am surprised there are not any tunnels - yet.

My guess is the reason for no competition is because vacant land is so hard to come by especially on this street. This is a very rare property that hasn't been developed yet and they aren't asking an arm and a leg for it. But if you're looking for a 1 acre lot in Chicago or even just a half acre you should expect to pay a couple million for it. My distributor went to the location and did the competition/traffic analysis and agrees it would probably be a homerun location. Everything looks better on paper than in reality so I'm still doing my research. This whole idea came about when 2 weeks ago after the deep freeze ended I needed a car wash and couldnt think of an automatic car wash any where near me (I've lived here for 30 years). I had to do a google search to find one that was about 15 mins away and ended up waiting in a 40 minute line at 1pm on a Monday.

 

[Earl Weiss]

My guess is the reason for no competition is because v......................... in Chicago

The other difficulty is getting zoning. The first order of business would be to see if the Alderman for that location is amenable to re zoning the property. If they are not amenable you might as well stop your efforts now.

 

[Tjmcnich]

The other difficulty is getting zoning. The first order of business would be to see if the Alderman for that location is amenable to re zoning the property. If they are not amenable you might as well stop your efforts now.

already on that Earl, the Alderman is looking into the Drive-way portion of the lot. Everything else seems to be OK they say. Should hear back today or Monday.

 

[soonermajic]

I got my 1st business loan from my local bank, for just $100k on a 3/1, 3 yrs ago.
Now getting my 2nd loan from another local bank, for $500k & owner is financing the other 20%. It was all real easy. Not sure why either. I have great credit & have a very high HS coaching income of $60k & 3 kids in college!

Tjncvich,
don't let anyone steal your thunder. You keep rowing your boat. If your gut tells you this is gonna be a Homerun, then you swing as hard as you can...just in case you hit it!

 

[Tjmcnich]

Thank you very much soonermajic!

 

[Waxman]

I got my first business loan from a Fitchburg, MA based bank and the SBA, together. I owned the land outright and used that as my down payment. I still love the car wash and detail business. I have diversified into used car sales and apartments, thanks to good advice from Whale of a Wash and others.

This is a tough business where you watch every penny and remain committed to customer satisfaction. That means continuous maintenance and improvements, reinvesting your money back into the business so that you remain current, profitable and highly functional. Where will your loan repayment be in 10-12 years when your automatic washes need a re-boot? What will that cost? Can you wash enough cars to make your payments or will you send $1.5MM to die?

If I sold my place today, I'd buy more rental property. It's not for everyone, but it's easy compared to washing, detailing and selling cars.

 

[Doug P.]

Keep shopping lenders, no rhyme or reason sometimes.

 

[robert roman]

I understand the Chicago market and with no competition for those distances and with that traffic I am surprised there are not any tunnels - yet.

Most likely because this has turned into a pipe dream story.

 

[Randy]

I have tried to open my business during the last year. Yeah, it was the worst time for trying to open a business, and it was almost impossible to find funding for that. Well, that's true. Most of the banks that I have contacted for a business loan turned me down.

What kind of business are you trying to open? It’s really hard to get business loan unless you have a lot of experience and a huge down payment.

 

[MEP001]

MurrayYvonne is a spambot.