Car Wash Feasibility Study in Arizona

More washes than Arizona's weight suggests

Arizona finances more car washes through SBA than its overall size in the program would predict, yet it finances them at roughly the going rate. Its 91 approvals for car and truck washes, FY2017 through FY2026, add up to $107.3 million and rank the state 12 of 53; a location quotient of 1.20x tilts Arizona's SBA lending toward washes, and by count washes sit 13 of 39 inside Arizona. The median wash loan, $888,000, is 0.96x the national median, close to par, and our screen finds no metric that stands apart from both Arizona's all-class record and washes nationally. This is a cell about concentration and a lender channel, not about different loan terms.

The 504 channel and Maricopa

SBA 504 handled 26 of the 91 approvals, against 65 under 7(a), and The Mortgage Capital Development Corporation holds 18 of those 504 loans, worth $26.3 million. The 7(a) book is scattered: America First Federal Credit Union holds 6 loans worth $7.1 million, and Celtic Bank Corporation, Alerus Financial, National Association and VelocitySBA, LLC hold 5 apiece. The middle half of approvals runs from $415,000 to $1.6 million, a band consistent with buying a site and building a tunnel rather than refreshing equipment. Franchise systems account for 5.5% of loans. Maricopa County holds 58 of the 91 approvals and Pima County 11. Approvals reached 15 in FY2021, worth $22.1 million, and 18 in FY2024, then eased to 6 in FY2026.

Cancellations, and a withheld loss rate

No less than 13.0% of Arizona wash approvals in the FY2017 to FY2024 cohort were cancelled, with the undisbursed ceiling also at 13.0%, near the national wash rate. The charge-off rate cannot be shown: the disbursed group behind it holds fewer than 30 loans, so we withhold it rather than print a figure that small a group cannot carry. A withheld rate is not a clean record, and no lender should read it as one.

Because the typical Arizona wash loan approaches $888,000, the study behind one has to stand up as a real estate case and an operating case at once. Demand should be built from traffic counts, visibility and access at the site, the competing washes within a short drive, and the membership base the operator expects to sign. Cost has to cover land, tunnel equipment, water reclamation and utility connections at current prices. Debt coverage needs testing at a conservative car count and realistic membership churn, with both 504 liens priced together where that program is used. A wash is usually appraised partly as a going concern, so the study should hand the appraiser stabilised income it can verify and be frank about how specialised the building is.

A single code covers car and truck washes, mobile operators included, so detailing vans and truck washes sit inside these Arizona numbers alongside tunnel and self-serve sites.