Car Wash Feasibility Study in Colorado

Colorado car washes and the 504 program

Car washes take a larger share of SBA lending in Colorado than nationally, with a location quotient of 1.26x, and the state ranks 8 of 53 for the class on 121 loans and $143.4 million over FY2017 to FY2026; within Colorado the class sits 12 of 39. The median Colorado loan is $761,000, 0.82x the class median nationwide. Running our distinctness screen on that median and on the cancellation and loss floors, against Colorado's lending in every class and against car washes everywhere, nothing clears both comparisons at the required margin, so the cell is notable for its concentration and its program mix rather than for an outlying rate.

B:Side Capital and the lenders behind Colorado washes

SBA 504 carried 43 of the Colorado loans and SBA 7(a) 78, a mix that reflects how often a car wash means land, a tunnel building and fixed equipment. B:Side Capital is the leading certified development company, with 30 loans worth $29.8 million, and Preferred Lending Partners added 6 worth $8.2 million. The 7(a) lenders are spread thin: Midwest Regional Bank with 7 loans for $8.5 million, then 5 apiece for The Bancorp Bank National Association, for UMB Bank, National Association and for Wells Fargo Bank National Association, with The Bancorp Bank National Association's 5 totalling $17.6 million. Half of Colorado approvals land between $323,000 and $1.6 million, and franchising is nearly absent at 0.83%. Jefferson County leads with 21 loans, Adams has 19, Arapahoe 13, Weld 12 and El Paso 11.

Floors and the funding cycle

Of Colorado car wash approvals dated FY2017 to FY2024, at least 8.3% were cancelled, and the ceiling matches it. Charge-offs stand at 1.5% of the 66 loans paid out between FY2017 and FY2021, the same 1.5% inside five years, and both are floors while loans remain open. Volume has come in waves: FY2020 and FY2021 brought 18 and 17 loans worth $30.5 million and $29.6 million, while FY2024 brought 7 loans and $5.2 million. For a lender the record is benign; for a borrower it says the risks to manage are the build and the ramp, which a loan of this size makes expensive to get wrong.

A Colorado car wash study starts with traffic and access: vehicle counts past the site, the turning movements into it, and the express tunnels and in-bay washes already within reach. It then tests the cost of land, site work, the tunnel and equipment against the band most Colorado loans fall in, with water and sewer connection costs priced rather than assumed. Debt service coverage depends on membership sales and wash counts in the ramp year and on seasonal swings, so coverage belongs on the page at a conservative count. The appraisal is the hardest test: a tunnel wash is special-purpose property, and the lender's value will rest on the income it can prove.

One code covers car washes and truck washes, mobile operators included, so this record cannot separate a conveyor tunnel from a truck wash bay or a mobile detailing van.