Car Wash Feasibility Study in New Jersey

A split car wash book

New Jersey's SBA car wash book splits between small credits and large site deals. The middle half of its 109 approvals from FY2017 to FY2026 runs from $57,000 to $1.7 million, a spread that holds equipment and working capital credits for existing washes at the bottom and the purchase or construction of a full site at the top. The median sits at $687,000, which is 0.74x the national car wash median, and gross approvals total $111.9 million. New Jersey ranks 9 of 53 states for the class, but the location quotient of 0.90x shows washes slightly underweight in its SBA lending, and the class ranks 14 of 39 within the state. Measured on median, cancellation and charge-off, the New Jersey cell never departs by our margin from both New Jersey lending overall and car washes countrywide.

The lender table shows the split plainly. TD Bank, National Association is current holder of the most loans, 20, but they total only $2.7 million. Fulton Bank, National Association holds 10 worth $14.5 million, New Millennium Bank 8 worth $11.3 million, Provident Bank 6 worth $9.8 million and Peapack Private Bank and Trust 6 worth $5.8 million, books built on site acquisitions and new builds. Of the 109, SBA 7(a) accounts for 96 and SBA 504 for just 13, so even real estate deals here have mostly been done as 7(a) loans. The franchise share is 0.00%; every borrower in the record runs an independent wash.

Outcomes on New Jersey wash loans

New Jersey wash commitments made in FY2017 through FY2024 carry a cancellation floor of 11.9%, and the ceiling climbs to 14.3% once loans still undisbursed are counted. Among 48 wash loans disbursed in FY2017 through FY2021, 4.2% have been charged off, and since the five-year rate is also 4.2%, every one of those losses came early. Both are floors. That timing argues for testing the opening years hardest.

What a New Jersey car wash study must test

Demand is not clustered in one county: Passaic County leads with 13 approvals, Ocean has 12, Camden 10, Union 9, and Bergen, Middlesex and Monmouth 8 each. At the site level, the study measures traffic counts, ingress and egress and stacking room, and it counts the tunnels and membership plans already competing for the same cars. Tunnel equipment, water reclamation and site work need real bids, because a build near the $1.7 million upper edge leaves little margin for overruns. Stress the coverage ratio on wet months and on a membership base that takes time to build. The appraisal has to value a special purpose property whose worth depends on location and equipment. On coding, SBA files truck washes and mobile wash services under the same industry code as car washes, so a fleet or truck wash project sits in this same New Jersey record.