Article on Drought Response and Car Washes Highlights Growth Opportunities for California Car Washes, Notes First Financial Capital

According to a story published June 9th on Marketplace, certain restrictions meant to save water in the midst of this historic California drought are looking to be very favorable for the state’s car washes. The article explains that new city water regulations in certain areas, including San Jose, have banned individuals from washing their own car by using a hose, which can use up to 100 gallons of water. Yet, because most commercial car washes use recycled water systems, they can do the same task and use much less water. With water restrictions becoming more and more common, commercial real estate lender First Financial Capital says that this will likely mean good business for car washes and their affiliated gas stations. They note that the expected increase in business could lead some car wash managers to expand and increase the number of locations that they manage. As a lender that has financed over two billion dollars in special purpose properties, including many car washes, First Financial Capital explains that there are several reasons why these types of businesses prefer their style of direct portfolio lending when in need of a loan. Here are two of the biggest reasons they provided:
Loans Amenable to Special Purpose Properties – Special purpose properties, such as gas stations or car washes, can be very profitable, but are often seen by banks as high risk investments due to the fact that the ability to service the debt is based on the success or failure of a single business. According to First Financial Capital, they use a variety of factors to assess the credit-worthiness of a loan candidate and are not quick to deny potential borrowers based on factors that banks see as unfavorable. A large percentage of First Financial Capital’s loan portfolio are car wash and gas station loans, and they continue to actively lend on special-purpose properties.
Flexible Repayment Terms – First Financial Capital says that another reason why borrowers appreciate their loans is that they do not charge a pre-payment penalty if borrowers choose to pay the loan back early. This means that if borrowers come up with the money to repay the loan sooner than expected, they can do so, and save on future interest payments.
First Financial Capital is currently accepting loan inquires for anyone needing real estate loans or bridge financing for commercial and residential investment properties between $1 million and $25 million, with a minimum of $10 million for anyone seeking a loan outside of California. Interested parties can call First Financial Capital at 310-694-5060 or visit them online at (Broker license number: CA DRE 01523939)