Converting to an Express Tunnel: How to Finance a Car Wash Conversion
Many car wash owners with older in-bay automatic or self-serve sites have considered converting to an express tunnel format. Owners pursue conversions for different reasons: to increase capacity, to introduce or grow a membership program, to reduce labor or to compete with newer washes nearby.
A conversion is not a simple equipment upgrade. It can involve demolition, construction, new equipment, new traffic patterns, new approvals and a period when the wash operates at reduced capacity or closes altogether. This guide explains how to evaluate a conversion and how car wash conversion financing typically works.
Types of Car Wash Conversions
- In-bay automatic to express or mini tunnel: Replacing an in-bay system with a conveyorized tunnel, sometimes by extending the existing building
- Self-serve bays to a tunnel: Removing self-serve bays and building a tunnel, sometimes keeping some self-serve capacity
- Full-service to express or flex-service: Changing the service model and site layout to reduce labor-intensive services
- Adding a tunnel alongside existing formats: Keeping some existing services while adding tunnel capacity
Each path has different costs, approvals and operational impacts.
Step 1: Confirm the Site Can Support the Conversion
The most important question is whether the property can physically accommodate the new format. Evaluate:
- Whether the lot is long enough for the tunnel length you need
- Whether there is room for stacking lanes and pay stations
- Where vacuums and exit routes would go
- Whether access points work for higher vehicle volume
- Whether existing drainage, water and electrical systems can be reused or must be replaced
A site designer or engineer experienced with car washes can evaluate the layout. Our guide to car wash site selection and zoning covers the site factors that matter.
Step 2: Confirm Approvals
A conversion may require new zoning approvals, site plan review, building permits and utility approvals, even if a car wash already operates on the property. Changes to building size, traffic flow or hours may trigger review. Ask local planning staff early what approvals will be required and how long they typically take.
Step 3: Evaluate the Business Case
A conversion should be evaluated as an investment. Consider:
- Current performance and what it would look like without changes
- Local competition, including any new tunnels planned nearby
- Realistic expectations for volume and membership after conversion
- Changes in labor, utilities, chemicals and maintenance
- Revenue lost during construction
- The total project budget
Be cautious about assuming that a conversion will automatically produce a specific increase in revenue. Build projections from local market research and document your assumptions. Our guide to car wash feasibility studies and business plans explains how lenders review assumptions.
Step 4: Plan for Downtime
Conversions often reduce or stop operations during construction. Plan for:
- Lost revenue during the construction period
- Continuing expenses such as loan payments, property taxes and insurance
- Retaining key employees during the closure
- Communicating with existing customers and members
Working capital to cover this period is an important part of the budget. Our guide to car wash working capital loans explains how operating cash needs can be financed.
Step 5: Build a Complete Budget
A conversion budget may include:
- Design, engineering and permitting
- Demolition of existing structures or equipment
- Building construction or extension
- Tunnel equipment, conveyor and controls
- Pay stations and point-of-sale technology
- Vacuums and site improvements
- Drainage, water and electrical upgrades
- Signage and branding
- Working capital and contingency
Get detailed quotes from contractors and equipment providers rather than relying on general estimates.
Financing Options for a Car Wash Conversion
SBA 7(a) Loans
SBA 7(a) loans can finance construction, equipment, working capital and, in some cases, refinancing of eligible existing debt for qualifying businesses. See our SBA loans for car washes guide and the SBA 7(a) program page.
SBA 504 Loans
For owner-occupied real estate projects involving significant construction or improvements, SBA 504 financing may be an option. See the SBA 504 program page.
Conventional Loans
Conventional business and real estate loans may suit owners with established cash flow and strong collateral. See conventional business loans.
Equipment Financing
Tunnel equipment can often be financed separately. See our guide to car wash equipment financing.
Combining Conversion With Refinancing
Some owners combine conversion funding with refinancing existing debt into a single structure. See our guide to car wash refinancing.
What Lenders Evaluate
- The site’s ability to support the new format
- Approvals secured or in progress
- The owner’s operating history and the wash’s current results
- Realistic post-conversion projections
- The complete budget, including downtime
- Collateral, including real estate and equipment
- Lease terms if the site is leased
Use our SBA Loan Calculator or Conventional Loan Calculator to estimate payments and compare them with conservative cash flow projections.
Common Conversion Mistakes
- Assuming the lot can fit a tunnel without a professional layout
- Underestimating approvals and timelines
- Ignoring revenue lost during construction
- Overestimating post-conversion volume and membership growth
- Overlooking utility upgrades
Frequently Asked Questions
Can I finance converting my in-bay automatic to a tunnel?
Conversions are commonly financed through SBA, conventional and equipment financing, depending on the project and borrower.
Will my wash need to close during a conversion?
Many conversions require reduced operations or a temporary closure. Plan working capital for that period.
Do I need new zoning approval to convert?
Possibly. Changes to the building, layout or traffic may require review even when a car wash already operates on the site.
Can I convert a leased car wash site?
It depends on your lease and landlord approval. Lenders will also consider the remaining lease term.
Final Thoughts
Car wash conversion financing works best when the site, approvals, business case, downtime and budget are all planned before construction begins. A well-planned conversion can give an older site a new direction; a rushed one can create financial strain.
US Professional Funding provides car wash real estate and expansion financing and car wash equipment financing and leasing. We can help you evaluate financing for your conversion.
