Overview
Higher leverage financing means borrowing a larger percentage of the total project or purchase. For car wash projects, higher leverage can be possible, but it usually requires stronger verification, stronger liquidity, and a structure that protects the lender if performance fluctuates.
What makes higher leverage more achievable
- Verifiable cash flow with deposits that align to reported revenue
- Strong coverage so payments remain comfortable even with variability
- High quality collateral in a strong location with durable demand
- Meaningful liquidity and reserves after closing
- Clean project scope with realistic budgets and contingency
Common tradeoffs of higher leverage
Higher leverage often comes with tighter underwriting, more reporting requirements, or higher pricing. Some structures also emphasize shorter terms or future performance tests before longer-term takeout is available.
How borrowers can structure toward higher proceeds
Borrowers may strengthen the deal by reducing uncertainty. That can include completing repairs before closing, documenting improved deposits, showing clear membership reporting, and maintaining reserves that reduce downtime risk.
What to avoid when seeking higher leverage
Avoid relying on aggressive projections to justify proceeds. Lenders will generally size loans off verified performance and conservative assumptions. A stable, well-supported story is more effective than a high-growth narrative.
Bottom line
Higher leverage is possible for strong car wash projects, but it must be earned through verification, stability, and reserves. The best approach is to reduce uncertainty and present a clean, conservative file.