In this article, you will learn about SBA 7a construction loans for building a car wash facility.

Post-COVID, the strengthening economy has seen an expansion not only in business in general but in the car wash sector.

The next few years should be interesting, as many businesses are currently expanding, using funds readily available from banks and other lending institutions and guaranteed by the Small Business Administration through its SBA 7(a) and SBA 504 loan programs.

It is anticipated that this economic expansion will eventually slow and stabilize. This indicates that small business owners should apply for the sizable commercial real estate loans they need as soon as possible.

While interest rates have risen the past few months, and will continue to rise until the Fed is satisfied it has done all it should to tamp down inflation, now is still a great time to get great rates from lenders along with other favorable loan terms.

SBA 7a loan specifics

The government guarantees the SBA 7(a) loan up to $3.75 million for loans over $5 million (75 percent). The SBA 7(a) loan program is open to banks, credit unions, and other traditional lenders. Some are Preferred Lenders, committed to approving SBA loans for qualifying small business owners.

Nearly all of your car wash's demands may be covered by an SBA 7(a) loan as long as they are related to legitimate business needs:

• a new vehicle wash facility is being built. The SBA 7(a) can be used to pay for any expenses related to new construction, including those for dryers, conveyors, prominent signage, bay doors, alarms, and security systems.
• a car wash's refinancing. An existing loan may be refinanced using the SBA 7(a) funding. To use the loan in this manner, there are specified requirements; for more details, see our article on Refinancing Debt.
• relocating to a new place. Using an SBA 7(a) loan to purchase an existing car wash is acceptable. Finding the ideal location is essential because car washes are often purpose-built facilities.

It is the first bullet above that we want to dive a little deeper on in this article.

Using an SBA 7a loan for construction of a new car wash facility

The Small Business Administration (SBA) 7a loan program is a great option for financing the construction of a new car wash facility. Here are a few things to keep in mind when using this loan program for your business:

• The SBA 7a loan program can provide up to $5 million in financing for your project.
• You will need to have strong credit to qualify for this loan program.
• The interest rates on SBA 7a loans are typically lower than those of other loans, making this a more affordable option for your business.
• You will need to have a detailed business plan and budget for your project in order to be approved for financing.
• The SBA 7a loan program can be used to finance both the purchase of land and the construction of your car wash facility.

The key is to work with a lender who understands the program and can help you navigate the process. Consulting with an experienced commercial loan advisor can help you find the right lender for your specific car wash construction project.

Once you've found a few potential lenders, it's important to compare their rates and terms to find the best deal.

Once you've found a lender, you'll need to fill out an application and provide supporting documentation. The lender will then review your application and make a decision. If approved, you'll be able to use the loan for both the purchase of land and construction of your car wash facility.