An Underperforming Car Wash Gets a Modern Update
Learn how we were able to finance this deal for a business owner looking to transform an outdated business model into something more cost effective.
Loan Amount
$3,484,000
Loan Purpose
The Small Business
Car Wash | Katy, TX
The Financing Challenge
The borrower set out to transform an existing full-service car wash into a modern, automated express wash, aiming to increase profitability and improve operational efficiency. The original business, which had been operating as a hand wash for 17 years, faced significant financial challenges, including high payroll costs and outdated equipment that restricted profitability.
The new approach required a shift in the business model, replacing the labor-intensive hand wash process with a fully automated express wash system. Upgrading the equipment was critical for supporting this new model as well as cutting operating expenses associated with payroll. While the borrower had not previously worked within the business, he brought relevant experience to drive this ambitious transformation.
Since the car wash had historically underperformed and lacked strong existing cash flow, the loan relied heavily on future financial projections. This made the transaction inherently complex to underwrite. To assess its viability, we carefully evaluated projected traffic volume, the area’s competitive dynamics, and the revamped business’s overall potential. By focusing on these factors, the express wash business model showcased a clear path to becoming a more efficient and profitable venture.
SBA 7(a) Loan Scenario
Here's what our borrower brought to Ready Capital
Business Experience
The borrower brought over nine years of transferable business experience.
Excellent Business Location
The location was great for traffic which helped predict and project strong future sales.
Collateral Shortfall
Lack of collateral was mitigated by other insurance.
CREATIVE SOLUTION
Reliable Results
- The borrower will be able to purchase the property and continue to provide the community with car wash services.
- The borrower got this deal done with only 15% down to secure the loan.
- The business is able to transform into a more efficient and effective business model.
The Non-Bank SBA Preferred Lender Difference
A small business loan is not an empty box like a checking or savings account. No two small businesses are alike when it comes to their financing needs. This means that small business financing requires out-of-the-box thinking and capabilities many banks simply can’t offer.
Ready Capital is a non-bank, SBA preferred lending partner (PLP). We speak fluent small business and have the process in place to help them reach their goals the first time.