Car Wash Feasibility Study in the Denver-Aurora-Centennial, CO Metro Area

A top-twelve car wash market by loan count

Car washes in the Denver-Aurora-Centennial area rank 11 of 458 metro and micro areas, where SBA approved 68 loans between FY2017 and FY2026, for $88.3 million. Among Denver's 39 asset classes this one is 12 of 39, and the location quotient of 1.26x shows car washes are a larger share of Denver's lending than of the nation's. The median loan of $918,000 sits at 0.99x the national median, so the ticket is typical for the class, which is a capital-heavy one.

Real estate financing in a large share

What distinguishes this cell is the weight of 504 lending: 44 loans were under 7(a) and 24 under 504. A car wash is a real-estate-and-equipment business, so the 504 structure is the natural fit for ground-up tunnels and acquisitions. B:Side Capital is the lead 504 holder with 15 loans and $12.3 million, and on the 7(a) side UMB Bank, National Association shows 5 loans at $4.9 million; beside it stands Wells Fargo Bank National Association at 5 worth $2.7 million. These are SBA's records of current holders.

No franchise presence

Franchise share is 0.00%, so every loan in the record is to an independent or locally branded operator; no branded system shows up. The middle half of loans runs from $382,375 to $1.9 million. One code spans car, truck and mobile washing, so the record mixes tunnels, self-serve bays and mobile units, and a study must define which format is meant.

Counties and years

Jefferson County has 21 loans, Adams County 19, Arapahoe County 13 and Douglas County 9. Of the years, only two can be shown: FY2020 with 13 loans and $22.1 million, and FY2021 with 7 loans and $17.5 million. Every other year is withheld, as are both loss rates, because the counts are thin; none of these is zero, and none is estimated here.

What a Denver-area study has to test

Anyone planning a wash in this market must test site traffic and access, the competing tunnels and their pricing, water, sewer and permitting cost, and the share of revenue that would come from membership plans versus single washes. Weather in a mountain-front market affects volume, so a study should show a low-volume winter. Because large loans in this cell include real estate, the appraisal will separate land, building and equipment, and debt service coverage should be tested at volumes below the plan.