Car Wash Feasibility Study in Connecticut

A mid-sized book

Connecticut car wash lending is moderate in size and sits close to the national pattern. The state posts 43 loans for FY2017 to FY2026 worth $49.8 million, a median of $775,000 that equals 0.84x the national class level, with core loans spanning $166,000 to $1.8 million, wide enough to span a small self-serve operation and a conveyor tunnel. The class ranks 21 of 53 among the states and 15 of 39 inside Connecticut, with a location quotient of 0.92x. No single metric marks this cell out as distinctive, and no franchise appears, at 0.00%.

Who finances them

Of the 43 loans, the program split is 30 under 7(a) and 13 under 504. In 504, New England Certified Development Corporation holds 9 loans for $10.9 million; in 7(a), Celtic Bank Corporation holds 8 for $14.2 million, a much larger average. SBA reports the present holder of each loan, which is what the lender names here show. TD Bank, National Association has 5 loans worth only $561,100. By planning region, New Haven has 9 loans, Capitol 7, Naugatuck Valley 6 and Southeastern CT 4, with Fairfield at 3.

Years that swing

Dollar totals follow a few big projects. FY2021 brought 9 loans worth $14.9 million, and FY2024 brought 9 worth $4.8 million, while FY2019 had only 2 loans for $800,000 and FY2020 had 2 for $3.4 million. FY2026 shows 4 loans and $5.8 million. A lender should expect lumpy volume.

A wide gap between two cancellation readings

Cancellation after approval reached at least 8.3% of the FY2017 to FY2024 cohort, and the figure rises to 13.9% when undisbursed loans are also counted as cancelled. The difference between the two readings is loans still undisbursed. No charge-off rate is printed for Connecticut car washes: Loan Analytics holds back any rate built on fewer than 30 loans.

What the study must settle

For a car wash the site is the business. A Connecticut study should count vehicles passing the site, test access and queue space for a tunnel, and measure competing washes within a short drive. Water use, discharge permitting and local zoning can delay or defeat a project, so they belong in the schedule and cost. Revenue depends on wash volume and on how many cars buy a membership instead of a single wash. Run debt service against a rainy-season dip and a competitor opening nearby. The appraiser will value the property as a special-purpose asset, and the code combines car and truck washes, including mobile ones.