Overview
SBA loans generally require the borrower to contribute equity to the transaction. The exact equity injection can vary based on the lender, the transaction type, and the risk profile. Car wash deals with clean documentation and stable performance tend to support stronger structures.
What drives the equity requirement
- Transaction type such as acquisition, refinance, or expansion
- Stability of the wash based on verifiable performance and expense realism
- Borrower experience operating similar businesses
- Liquidity after closing including reserves for maintenance and seasonality
What can increase down payment needs
Newer operators, transitional performance, deferred maintenance, or weaker documentation can lead lenders to require more borrower equity or additional reserves.
Funds to close are more than the down payment
Borrowers should plan for closing costs, third-party reports, initial operating liquidity, and any immediate repairs or upgrades that are needed to protect uptime.
How to position the deal for a stronger structure
Present clean revenue support, realistic expenses, and a simple post-closing operating plan. Lenders get more comfortable when the deal is well-capitalized and not dependent on aggressive growth assumptions.
Bottom line
SBA down payment requirements for car wash loans depend on deal risk and lender underwriting. The best way to improve leverage is to present verifiable performance and maintain adequate liquidity after closing.