Financing a Car Wash:  A Step-by-Step Guide for Entrepreneurs 

by Brian Davis, CFO / Howco, Inc. 

The car wash industry has been steadily growing for years now. With vehicle ownership rising and busy lifestyles fueling demand for convenience services, launching a car wash can be a smart investment. But like any business, it requires capital, and that's where many entrepreneurs get stuck. 

Whether you're planning to start a brand-new operation or expand an existing one, understanding how to finance your car wash is essential. In this blog, we’ll walk you through practical financing options, key tips, and what lenders look for in a car wash loan application. 

Step 1:  Know Your Startup Costs 

Before you even think about funding, you need to know how much you’ll need. Costs can vary widely depending on your business model (self-serve, automatic, full-service), location, and size. 

Here’s a rough breakdown of typical startup costs. Cost amounts are purposely omitted,  because they can vary widely depending on lots of factors, including geographic location, whether you are building or acquiring a car wash, possible needed improvements to an acquired wash, type of car wash, and the equipment chosen. 

• Land and/or car wash acquisition 

• Construction or renovation 

• Equipment 

• Permits and licenses 

• Marketing and signage 

• Working capital (first 3–6 months) 

Total startup costs can range from a few hundred thousand to several million dollars depending on the above and other factors.  

Step 2:  Explore Your Financing Options 

Once you’ve estimated your costs, it's time to explore how to fund your business. Fortunately, there are several financing options available. 

• <strong>Small Business Association (SBA) </strong> 

SBA loans are government-backed and offer favorable terms such as low interest rates and long repayment periods. The SBA 7(a) loan is a common option for car wash businesses. 

• Pros: Low rates, flexible use of funds 

• Cons: Longer approval process, requires strong credit and a business plan 

• <strong>Equipment Financing</strong> 

Need funding specifically for washers, vacuums, or POS systems? Equipment loans use the equipment itself as collateral. 

• Pros: Fast approval, doesn’t require a large down payment 

• Cons: Limited to equipment purchases only 

• <strong>Commercial Real Estate Loans</strong> 

If you plan to purchase land or buildings, a commercial real estate loan can help. 

• Pros: Spreads cost of land/building over time 

• Cons: Usually requires a down payment of 10%–30% 

• <strong>Alternative Lenders</strong> 

Online lenders and fintech companies offer faster funding—sometimes in just 24 hours. 

• Pros: Fast, easy applications 

• Cons: Higher interest rates, shorter terms 

• <strong>Investors or Partnerships</strong> 

You might find a private investor, business partner, or angel investor interested in backing your project. 

• Pros: May require less or no repayment 

• Cons: You may give up partial ownership or control 

Step 3:  Prepare Your Business Plan 

Lenders want to see that you’ve done your homework. A well-prepared business plan should include: 

• Executive summary 

• Market analysis 

• Competitive landscape 

• Location and marketing strategy 

• Financial projections 

• Use of funds 

• Owner and management bios 

A solid plan shows lenders (or investors) that you understand the business and have a path to profitability. 

Bonus Tips for Securing Funding 

• Improve your credit: A FICO score above 680 can help secure better loan terms. 

• Save for a down payment: Expect to invest 10%–30% of your own capital. 

• Get pre-approved: Talk to lenders early to understand your borrowing capacity. 

• Work with industry experts: Consider hiring a consultant to guide you through planning and financing. 

Final Thoughts 

Financing a car wash isn’t just about getting a loan—it’s about creating a solid, profitable plan and presenting it with confidence. Whether you're dreaming of a high-end automatic wash or a simple self-service setup, there’s a financing option to help bring your vision to life. 

Take the time to research, plan, and connect with the right financial partners. Your clean, profitable future could be just a rinse and repeat away. 

Please contact a Howco representative to help you Plan, Develop, Operate® your car wash. Howco has assisted thousands of operators of all types since 1969. Let us help you, too! 

Also, be sure to explore the podcast series How-To With Howco for more in-depth insights on this and other car washing subjects.