Car Wash Feasibility Study in Texas

The single number that separates Texas car wash lending from its state and from car washes nationally is the median loan: $1.7 million, or 1.83x the national median for the class. Texas ranks 2 of 53 among states with 430 approvals and $854.2 million from FY2017 to FY2026, with a location quotient of 1.59x: Texas puts far more of its SBA lending into car washes than the country does. Inside Texas the class places 12 of 39 by loan count.

A property loan with a business attached

The middle half of Texas car wash loans runs from $605,000 to $3.1 million, the range of a land purchase plus a new building and equipment package. SBA 504 carries 94 of the loans and SBA 7(a) 336, and the 7(a) book sits with lenders who write large tickets: Metro City Bank holds 47 loans worth $158.9 million and Celtic Bank Corporation 35 worth $99.6 million, while Commonwealth Business Bank holds 13 worth $34.0 million. On the 504 side, Capital Certified Development Corporation is the biggest holder, 34 loans and $48.3 million, followed by LiftFund, Inc. with 26. Franchise units are only 4.2% of loans. Metro City Bank's figures are its holdings as SBA lists them today, which may include purchased loans.

Strong on losses, softer on funding

Losses are thin. Of the 224 car wash loans disbursed in FY2017 to FY2021, 1.3% have gone to charge-off, a floor, and the same 1.3% did so inside five years, meaning each recorded loss happened early. Cancellation is the soft spot: a floor of 12.4% that rises to 15.2% once undisbursed loans count, a gap consistent with construction loans still waiting on draws. Annual volume has fallen from 61 approvals and $122.5 million in FY2019 to 24 approvals and $38.4 million in FY2026.

What the study must carry for a Texas wash

At these loan sizes the appraisal is the gate. A study has to support the land and building value on comparable sales and an income approach that uses realistic wash counts and membership revenue, because the lender's collateral is mostly real estate. Demand testing must map competing washes in the target county; Harris has 82 approvals, Tarrant 63, Dallas 47 and Collin 33, so the big metros already carry a lot of SBA-financed capacity. Cost testing covers site work, tunnel equipment and water systems, and debt service coverage should be stressed for weather and for a new competitor opening nearby. One coding limit applies: car and truck washes, mobile washes included, share one industry code, so the cell blends formats that a study has to separate.