In today’s fast-paced, competitive world, it is crucial to upgrade your wash with equipment that features the latest technological advancements. Newer equipment is more efficient and will help you maintain an advantage over your competitors. However, new equipment and machinery are expensive, and paying the full amount upfront is not realistic for everyone. Fortunately, you can finance it! Understanding your financing options is crucial for long-term success and helping your business compete without crippling your budget with loan payments. In this guide, you’ll learn about the ins and outs of financing car wash equipment, the loan options available, and the trusted lenders we’ve partnered with to help our customers finance their purchases with confidence!
First Things First: Conduct a Financial Analysis
Car washes are profitable businesses. Self-serve models can average around $40,000 per year, and tunnel washes generate up to $700,000 annually. Reaching that level of success begins with smart financial planning. Budgeting for car wash equipment goes far beyond the initial purchase. It requires a thorough analysis that considers site preparation, installation costs, ongoing maintenance, and future upgrades as technology continues to evolve.
You will also need to account for taxes, loan repayments, interest rates, recurring slow seasons due to the weather, and unexpected financial costs for damages and repairs. Past financial reports will help you gauge monthly income, revenue, and growth. This allows you to determine a reasonable budget for the new equipment that you can comfortably afford.
Not a finance expert? Consider consulting with a financial analyst to run the numbers. They will help you understand the numbers, forecast revenue and expenses to give you a clearer picture of what’s financially feasible for your business. These numbers provide your financial analyst with a solid foundation for calculating the return on investment for car wash equipment and other expenses. Financial analysts can also provide unique insights because they take industry research into account as they assist you in setting a reasonable budget. Most importantly, they can help you select a financing option with a repayment plan suited to your business model and the financials of your car wash. Here are a few equipment financing options your financial analyst may recommend for your car wash.
What are the Primary Car Wash Equipment Financing Options?
Equipment Loan
A common option chosen by many small businesses is an equipment loan. These loans allow you to use the equipment for the duration of the loan term. However, it is also collateral. This means if you miss payments, the lender can repossess the equipment. Once the loan is paid, the equipment is yours! The main advantage of this loan is that you can use the equipment to generate profit while you work to pay off the loan.
Newer car washes will have a harder time getting approved for these loans because lenders look for higher personal credit and established business history.
Personal Loan
Another equipment financing option for car wash owners is a personal loan. This type of loan assesses your ability to pay based on your financial situation and credit score. This option is a better fit for start-up car washes to purchase equipment.
However, since these loans are filed under your name, failure to repay them will drop your credit score significantly. These loans pose a serious financial risk if your car wash is new and you don’t have a track record of success yet.
Equipment Lease
Leasing equipment involves renting equipment for a fixed period. During the term of the lease, you will make regular payments. If you default, the equipment is collateral, and the lender will repossess it from you.
One disadvantage of equipment leases is that some investors consider a lease a liability since you don’t own the equipment, and it is not an asset in your books.
The main benefit of equipment leases is their very low upfront costs. You may also be able to buy the machinery with a balloon payment at the end of your contract. Lastly, upgrading your car wash equipment can be much easier since you don’t need to pay upfront for new tools.
These financing options are ideal choices for car wash owners and suit a variety of car wash business models. A solid financial plan will help you choose the car wash equipment financing option that is right for you!
Financing Services Available to Kleen-Rite Customers
Now that you understand the common financing options utilized by car wash owners, you are ready to explore reputable lenders. We can help connect you with two trusted financing providers who share our unwavering commitment to helping our customers succeed.
Ascentium Capital Finances Large Equipment Purchases
If you need to finance a large equipment purchase, Ascentium Capital is a great choice! They are a commercial lender dedicated to making it easy for small business owners to finance equipment purchases with short-term business loans. Their application process is fast, allowing you to spend more time running your car wash and less time filling out annoying forms.
Ascentium will finance purchases ranging from $10,000 to $2 million to help acquire state-of-the-art car wash equipment and stay ahead of your competitors.
For loans over $400,000, Ascentium will need additional financial information. This may include 1 to 2 years of debt schedules, Profit and Loss (P&L) statements, tax returns, and other documents as requested. Please be patient as processing times for loans exceeding $400,000 may be longer due to the extra paperwork.
How to Qualify
- The order total for equipment must reach a minimum of $10,000
- 24+ months in business
- 650+ FICO credit score
- Ascentium will NOT finance consumables such as chemicals
Things You Can Finance
- New Equipment
- Used Equipment
- Software
Examples of Qualifying Equipment for the Industries We Serve
- Products from the KR Equipment Line
- Operator Pro Plus Pump Stand
- Operator Pro Junior Pump Stand
- Large Coin Box Orders
- Pro Water Plus Reverse Osmosis Systems
- Large Car Wash Equipment Purchases
- Vacuums and Stanchions
- Pressure Wash Equipment
- Laundry Equipment
Now that you know how to qualify for financing and what equipment is eligible, let’s walk you through the application process. It’s fast and easy!
The Application Process
Our larger equipment options are built to order and configurable to the specific requirements of the services you provide to your customers, so they receive fast and reliable service every time they visit your wash. To order this equipment, we ask you to call in so a member of our team can walk you through the available options. Our team is trained to ask you how you plan to pay for the purchase during this call. This is where they will mention our relationship with Ascentium Capital and recommend financing your purchase with them. If you have the cash, then you can pay for it upfront.
If you want to finance your purchase through Ascentium, our team member will direct you to the one-page application form. It is recommended to have a quote for the order so that Ascentium will know exactly how much money you want to finance.
Once Ascentium receives your form, one of their agents will contact you and guide you through the remaining steps of the process. Approval doesn’t take long. As soon as Ascentium finalizes your loan and releases the funds, we’ll get your order moving!
Instructions:
- Call to place your equipment order with a Kleen-Rite team member.
- Discuss how you are going to pay during the call.
- If financing is needed, the Kleen-Rite team member will recommend Ascentium Capital’s financing.
- You’ll be directed to Ascentium’s one-page application form.
- Have your equipment quote ready when filling out the form. (Not required but highly recommended.)
- Submit the form to Ascentium.
- An Ascentium agent will contact you to complete the financing process.
- Once the loan is approved and the funding is made available, we will process and ship your order.
Why Should You Finance with Ascentium Capital?
There are many benefits to financing your equipment through Ascentium Capital.
Fast Approval Times
The most attractive benefit is Ascentium’s lightning-fast approval times. Loans are often approved and funded within a week of applying. What makes this such a compelling benefit is that it allows you to take advantage of limited-time show specials and other discounts before they expire. Approval times with other lenders are longer, which causes you to miss out on great deals.
Soft Costs Can Be Added to the Loan
Ascentium allows you to bundle soft costs in the loan. Up to 30% of soft costs may be financed. Soft costs include installation, electrical work, plumbing, tax, freight, and more.
One Page Application
A one-page application makes it fast to apply! This saves valuable time and makes the application process easy for you.
Flexible Submission Options
Choose how you want to submit your application! Use DocuSign or fax a paper document. Your Ascentium agent will provide you with additional details such as the fax address and DocuSign link.
Competitive Interest Rates
Interest rates from Ascentium are competitive with those of local banks and other lenders. Interest rates are likely lower if you have a high credit score.
Consultative Approach
Your Ascentium agent will help you choose loan terms and a repayment plan that aligns with your monthly income and expenses, preventing strain on your budget.
Flexible Term Options
Loan terms are flexible. Choose from 36 to 72 months for a repayment schedule that aligns with your budget.
Wide Credit Window
Ascentium accepts a wide range of credit scores. The lowest credit score that will be approved is a FICO 650.
Multiple Repayment Program Options
Pick a repayment plan option that suits your budget! Choices include $0 down, deferred, step-up, seasonal, and more!
Depreciation Tax Documentation Included
Ascentium will send you the IRS Section 179 form. This will help reduce your taxable income in the year you purchase the financed equipment. This tax benefit allows you to deduct the full purchase price upfront, rather than depreciating it over several years.
You Own the Equipment
Ascentium allows you to use the equipment itself as collateral. This means you don’t have to risk a lien on your home or other personal assets.
Finance Smaller Purchases with QuickSpark Financial
Do you want to finance smaller purchases? QuickSpark Financial can help you! They will finance purchases below the $10,000 minimum required by Ascentium. They will even finance consumables such as car wash chemicals. The QuickSpark application is also fast and easy!
Final Thoughts
Whether you’re breathing new life into a neglected car wash, upgrading equipment to stay ahead of the competition, or building a new wash from the ground up, understanding your financing options and selecting the right lender are key to the sustainable growth and long-term success of your car wash!
If you are looking for a source for reliable car wash business advice, check out our podcast, Kleen-Rite Radio.
About the Author
Anton Hummer
Chief Financial Officer
Anton Hummer is the Chief Financial Officer (CFO) at Kleen-Rite Corporation and a member of the leadership team. He is responsible for Kleen-Rite’s financial health and profitability, which ensures long-term growth and stability of the company.
He has over 18 years of experience and has held several Accounting and Finance Executive roles, most recently at UGI Corporation. Anton is also a Certified Public Accountant.
Anton has extensive experience throughout his career in securing financing for large equipment, business acquisitions, land purchases, and development.
Outside of Kleen-Rite, Anton serves as the Chairman of the Board for Hummer Turfgrass Systems, a small business that has been in his family for over 55 years. Anton and his wife are graduates of Virginia Tech and die-hard Hokie fans who regularly attend their football games. He also enjoys camping, hiking, and biking with his family.
