Car Wash Feasibility Study in Pennsylvania

Approved, then cancelled

In Pennsylvania the car wash figure that matters most is how often an approved loan never closed. At least 20.9% of the state's FY2017 to FY2024 wash approvals were cancelled after approval, and 22.1% on a ceiling that counts every undisbursed approval as cancelled too. That floor is above the national rate for car washes by more than our distinctness margin, and it stands apart from Pennsylvania's cancellation record across all classes as well. Nothing else in the cell is unusual enough to flag. The state's 103 approvals across FY2017 to FY2026, worth $121.2 million, rank it 11 of 53, a location quotient of 0.86x leaves washes a little light in its SBA lending compared with the nation, and washes rank 15 of 39 among Pennsylvania's classes.

Small loans beside full builds

The size range is very wide. Half the approvals fall between $50,000 and $2.1 million around a median of $605,000, which is 0.65x the national wash median, and that spread points to a mix of small equipment or working-capital loans to existing washes and full site builds. SBA 7(a) took 87 loans and 504 took 16. The 7(a) holders mirror the split: TD Bank, National Association holds 8 loans worth just $246,400, while First Commonwealth Bank holds 5 worth $18.1 million. The Huntington National Bank has 7 and KeyBank National Association 6; Empire State Certified Development Corporation leads 504 with 7. Franchised washes make up 5.8% of loans. Montgomery County leads with 18 approvals, then Allegheny with 13 and Philadelphia with 9. FY2022 was the dollar peak, 17 loans worth $30.4 million, and FY2023 the trough, when 7 loans totalled $917,000.

Losses, and what the study must survive

Losses are the lesser concern. Pennsylvania's 33 wash loans funded during FY2017 to FY2021 show 6.1% charged off, a floor, and 3.0% inside five years, above the national wash figure though not flagged as distinctive. The cancellation floor, though, points a borrower to the stretch between approval and closing, where a site, a permit, a construction bid or an appraisal that does not match the plan can stop a deal. The study has to be written to carry a Pennsylvania wash through that stage.

That means establishing demand from traffic, access, competing washes and the realistic membership base around the site; testing land, equipment, water handling and construction against firm quotes rather than estimates; and showing debt service coverage at a cautious car count before the lender commits. Above all, the study should reconcile its income forecast with the value an appraiser will reach for a special-purpose building, because a gap between the two is one of the ways an approved Pennsylvania wash loan stops short of funding.

Truck washes and mobile washes carry the same code as car washes, so every one of them is counted together in these figures.