Worked Example: SBA 7(a) Flex-Serve Car Wash Feasibility Study in Texas

This is a worked example, not a client engagement. It follows a hypothetical ground-up car wash on a suburban commercial pad in Williamson County, inside the Austin metro: an express exterior tunnel, a customer lobby, and four covered lanes where staff finish the interior by hand, financed with an SBA 7(a) loan. Public facts are cited to the page they came from, project numbers that nobody published are labelled as assumptions, and every table recomputes from the inputs printed with it. Three readers are in view: a lender deciding whether the request fits the program, a sponsor deciding whether to pour concrete, and anyone searching for what a study of this kind must prove before money moves.

At a glance. A sponsor wants to build a tunnel and lobby of an assumed 5,600 square feet with four finishing lanes, and asks for the 7(a) maximum. Priced at the market figures a listed operator reports, the sponsor's pro forma covers debt service comfortably. Priced at the figures a new independent site in a crowded suburb would more plausibly reach, the study's base case does not. The restructure at the end shows the loan the base case can carry and what that costs the sponsor in equity.

• Total project cost: $7,338,725
• SBA 7(a) loan requested (the program maximum): $5,000,000
• Borrower equity (share of total project cost): 31.9%
• Stabilized net operating income, base case: $457,186
• Debt service coverage at stabilization, base case: 0.76x
• Volume needed for the 1.25x binding minimum (percent of base case): 131.2%
• Restructured loan that passes both tests: $3,050,000

What a Feasibility Consultant Tests First on a New-Build Flex Car Wash

A lender reading a request for a ground-up car wash asks one thing before anything else: will a site that has never washed a car reach its stabilized volume fast enough to pay the note while it gets there? A feasibility consultant answers with evidence instead of the sponsor's enthusiasm. The question splits into four tests.

The first test is the member count: a modern express wash earns most of its money from unlimited monthly memberships, so revenue is a claim about how many people pay every month and at what price. The second is the interior service that makes the site flex-serve, which adds a revenue line and a labor line, and the labor line tends to consume the revenue. The third is the ramp, because note payments begin before volume arrives. The fourth is value, because the lender holds a special-purpose building as collateral.

The case runs the tests on two sets of figures side by side. The sponsor's pro forma takes market figures from public filings and trade reports at their own values. The study's base case changes four of those inputs, each with a stated reason.

They disagree on whether the project works. The sponsor's pro forma covers debt service 1.89x on the full $5,000,000 loan. The base case covers it 0.76x. The lender's assumed minimum of 1.25x sits above the program floor of 1.15x, so the lender's minimum binds, and the base case misses it by a wide margin. The member count decides the result, and the case demonstrates that instead of leaving it to a footnote.

Decision. Loan size would follow base-case earnings, since the sponsor's member count is the figure a new independent site has the least evidence for.

The Texas and Williamson County Car Wash Market

Texas is the largest single-state footprint of the largest listed operator. Mister Car Wash, Inc. reports in its annual filing that 98 of its 548 locations were in Texas at the end of 2025, more than in any other state it lists ^[1]. A chain building heavily in the state is evidence of demand and also a rival for the same drivers.

Nationally, Matthews Real Estate Investment Services tallied 12,029 confirmed operating conveyor washes on September 23, 2026, and cautions that the tally is not an independently certified census ^[2]. Matthews Real Estate Investment Services also shows net additions of car wash establishments shrinking from 991 in 2021 to 249 in 2025, while the top fifteen operators control about 30 percent of the confirmed sites ^[3]. The build boom that dropped tunnels into suburbs has slowed, but the stock it created remains, and a new site arrives into it.

The format matters as much as the count. Matthews describes a flex-service car wash as a hybrid that offers the automated express conveyor wash plus a full-service option in which employees detail the car's interior ^[4]. In the same 2023 piece Matthews wrote that full-service car washes, which use the most employees and manual labor and charge the highest prices, are in decline ^[5]. Flex sits between the two, and an October 2026 International Carwash Association article written by an equipment supplier, a party with reasons to like the format, describes it that way ^[6].

The same International Carwash Association article quotes a Houston-area operator who says express washes are everywhere in that market and many compete heavily on price ^[7]. That is a Texas voice on price pressure, and it is why the base case does not hand the site a mature chain location's membership count.

Matthews also wrote in October 2026 that an expensive site, weak execution or an aggressive capital structure is exposed faster in today's car wash market than a few years ago ^[8]. This project carries a cost basis that the later tables show to be high against published ranges, and it is financed at the program maximum, so that warning applies to it directly.

Matthews reports that strategic buyers no longer want the ramp-up risk of new builds and pay premium multiples for stabilized express and flex-serve operations ^[9], and that a new car wash can take 18 months or longer of permitting and construction ^[10]. A stabilized site is saleable at a good price, but the lender funds the stretch in which buyers will not pay for the business.

Decision. The market evidence supports demand for the format and does not support a membership count above the base case, because the sources that describe the opportunity also describe saturation and slower growth at mature sites.

Supply and Public Comparables for a Williamson County Tunnel

Competitors near a particular Williamson County pad cannot be counted from the public sources this example could read: the Texas Comptroller's car wash sales tax records sat behind a bot challenge, and no county-level count of tunnels turned up. The public record does give the national shape of supply, and the table sets it beside the format facts. Nothing in it names a business as a party to the loan.

The three-mile row matters most for the site. Matthews reports that 87 percent of roughly 12,000 confirmed conveyor washes have another conveyor wash within three miles, and warns that nearness by itself is no sign of an overbuilt market ^[11]. A sponsor reads rivals nearby as proof of demand, while a lender expects a new independent site to share its trade area. The base case takes the lender's side by assuming 2,600 paying members, well under the 4,144 per location the listed operator averages (Table 2 prints the comparison).

The listed operator is the best public income comparable, with caveats. Mister Car Wash, Inc. reports 2025 net revenues of $1,051.7 million, cost of labor and chemicals of $302.3 million (29 percent of revenue) and other store operating expenses of $436.7 million (42 percent) ^[14]. The Mister Car Wash, Inc. filing says those other store expenses include rent, utilities, property taxes and depreciation of site assets, among other items ^[15], so they cannot be compared line by line with an owner-operated site that owns its land. Mister Car Wash, Inc. also reports a 32.8 percent Adjusted EBITDA margin for 2025 ^[16], struck after rent and overhead.

Mister Car Wash, Inc. had 2,271,000 unlimited wash club members at the end of 2025 against 2,124,000 a year earlier ^[17]. The Mister Car Wash, Inc. filing also provides for locations converted from the staffed Interior Cleaning format to the Express Exterior format ^[18]. The biggest operator in the country is moving some staffed-interior sites toward the cheaper exterior-only format, so a new independent site is choosing the format the chain is converting out of. The case treats that as the central risk of the concept.

Table 2 puts the base case beside those ratios. Case revenue is 87.8 percent of the operator's average location, and case labor and chemicals together run 41.8 percent of revenue against the operator's 28.7 percent. That gap is what an interior crew costs: the interior crew's pay is 63.2 percent of the interior revenue it produces.

Matthews puts good single express sites at roughly 8 to 10 times EBITDA when the real estate is part of the sale ^[19], and notes that sellers often accept less for a wash than the building and business would cost to replace ^[20]. Both statements return in the value discussion.

Decision. The study would treat the listed operator as a ceiling for member counts and a floor for labor cost, because one new site has neither its scale nor its power to convert formats across a portfolio.

Demand: Registrations, Population and Members

A car wash draws from cars, so the demand lens counts registered vehicles and the people who own them. The Texas Department of Motor Vehicles reports 574,108 vehicles registered in Williamson County in fiscal 2025, which ran from September 1, 2024 through August 31, 2025 ^[21], against 552,110 in fiscal 2024 ^[22] and 525,789 in fiscal 2022 ^[23]. Registrations have risen 9.2 percent since fiscal 2022, and the county holds 2.13 percent of the 26,959,135 vehicles the Department reports registered across all Texas counties in fiscal 2025 ^[24].

The people behind the cars are growing faster. Williamson County went from 609,059 people in the Census Bureau's April 2020 estimates base to an estimated 752,827 by July 1, 2025 ^[25], a rise of 23.6 percent. It ranks the county ninth among U.S. counties by numeric population growth from July 2024 to July 2025, adding 23,814 residents ^[26], and notes that the fastest-growing counties among some of the largest metro areas tended to be on the outer edges, a pattern especially pronounced in Texas ^[27]. A suburban pad in Williamson County is that kind of location.

Table 3 prints the lens, and its useful row is not the growth. Registered vehicles per resident are 0.76, so new residents bring cars, yet the base case's members are only 0.45 percent of the county's registrations. A lender should not read the size of the pool as a promise of the share, and growth draws the chains as well as the sponsor.

Churn is the constant drag on the member count. Rinsed, through Matthews, reports average monthly membership churn of 7.8 percent in the third quarter of 2026 ^[28], and Matthews puts typical churn at around 7 to 9 percent a month ^[29]. AMP's analysis, relayed by Matthews, found that two thirds of new members signed up at a discount; about a third of the discounted 2025 signups were still active a year on, compared with nearer half of those paying full price ^[30]. That is why the base case assumes a membership price of $28.00 a month, below the roughly $30.31 upper bound the listed operator's filing implies.

The retail side is softer. Rinsed, through Matthews, reports that retail car wash revenue at established locations declined in 19 of the 24 months to the third quarter of 2026 ^[31]. Rinsed, through Matthews, also reports that memberships made up about 71 percent of same-store revenue that quarter, that membership revenue grew 9.8 percent while retail revenue fell 9.6 percent, and that total revenue at sites open two years or more grew 1.1 percent ^[32]. Rinsed, through Matthews, puts second-quarter same-store growth at 5.4 percent for sites open at least one year but 2.7 percent for those open at least two years ^[33]. Growth is front-loaded, and a mature site flattens.

Conversion of retail customers to members depends on site size. Rinsed, through Matthews, reports third-quarter 2026 retail-to-member conversion of 17.1 percent at the largest sites, 10.7 percent at the middle band and 3.3 percent under 2,000 members ^[34]. The base case assumes 2,600 members, which sits in the middle band, and the sponsor's 4,144 would place the site in the top band that belongs to established locations. A new site cannot be assumed into that band on its first day.

Decision. The study would carry the assumed 2,600 members as the base and treat 4,144 as a target to be earned, because conversion, churn and discount-led signups all work against a new independent site reaching a mature chain's count.

The Site: A Williamson County Pad, Wash Water and the Aquifer

The example assumes about 1.5 acres on a suburban commercial pad along an arterial, with land assumed at $1,300,000 and site work assumed at $1,000,000. No public source gives a land price or a unit cost for this pad, so both are judgement; a broker's opinion and a contractor's bid would replace them. Traffic counts, the tunnels within three miles, water and sewer rates, and zoning are unsourced here and the case supplies none of them. Matthews wrote in 2023 that zoning, which varies by city, is the most significant barrier to development and can take years to resolve ^[35].

Texas regulates wash water directly. The Texas Commission on Environmental Quality's June 2026 car wash guide states that TCEQ regulations require a reduced-pressure principle backflow prevention assembly, tested by a licensed tester on installation and at least annually ^[36]. It tells operators to get the local wastewater treatment facility's approval before discharging car wash water to the sewer ^[37], to install a catch basin or grit trap ^[38], and never to send wash water to a septic system, which it states is prohibited ^[39]. A pad with no sewer connection is therefore not a car wash pad, whatever its traffic.

The guide also states that only sludge transporters registered with TCEQ may legally pump and transport wet grit trap waste ^[40], and that some local ordinances require grit traps to be cleaned at least once every 90 days ^[41]. That is why repairs and maintenance in the operating statement include grit trap pumping. It also tells the builder of a new car wash to determine before construction whether the work needs a construction stormwater permit ^[42].

Williamson County adds a question that few other states raise. TCEQ states that before building on the recharge, transition or contributing zones of the Edwards Aquifer, a builder must have its plan reviewed and approved by the TCEQ Edwards Aquifer Protection Program ^[43]. The program's page directs applicants in Williamson, Travis or Hays County to its Austin Regional Office ^[44]. Whether the hypothetical pad lies on a zone is something this example cannot answer, and it does not say that the pad does; the study would check the TCEQ maps before the land contract goes hard.

Two tax facts bound the operating statement. The Texas Comptroller states that Texas has no state property tax and that local taxing units set and collect property tax ^[45], so the model uses an assumed taxable value of $4,750,000 and an assumed combined local rate of 2.00 percent. The Comptroller lists a franchise tax no tax due threshold of $2,650,000 for report years 2026 and 2027 ^[46]. Stabilized revenue is $910,600 below it (Table 4 prints the gap), so the model carries no franchise tax. The Texas sales tax treatment of car washing could not be sourced, so the case says nothing about it.

The building is a tunnel of about 130 feet with an equipment room and a customer lobby, plus a canopy over the four finishing lanes. A Texas flex site that the International Carwash Association article describes uses detail belts designed to deliver a full-service interior and exterior wash in 15 minutes or less ^[13], and the model assumes that service time only to check capacity: four lanes working assumed 15 minute services across assumed 13 hour days could handle 208 services a day, and the base case assumes 45 a day, or 21.6 percent of that. The lanes are built for a peak that the average day does not reach.

Decision. The study would not release the site for design until the sewer connection, the zoning letter and the Edwards Aquifer determination are in hand, because each can change the cost or the schedule of a project that earns nothing until it is built.

SBA 7(a) Rules for a Ground-Up Car Wash

The program fits this project in several respects. A car wash is an operating business that uses its own building, so the ban on passive landlords misses it: section 120.110(c) rules out businesses owned by developers and landlords that do not actively use or occupy what the loan finances, save for Eligible Passive Companies ^[47]. A newly built property must be at least 60 percent borrower-occupied ^[48], and the sponsor uses the whole building. Proceeds can buy land and improve a site ^[49], build new buildings and install fixed assets ^[50], and fund supplies and working capital ^[51]. The cost table uses all of those purposes.

The terms follow from the same rules. Twenty-five years is the longest 7(a) term, and the part of a loan used to buy or improve real property can run 25 years plus whatever construction takes to finish ^[52]. Other uses are limited to ten years, unless the loan pays for real estate or for equipment whose useful life exceeds ten years ^[53]. The model puts the land and building on the longer term and the equipment and working capital on ten years. SBA does not allow balloon payments on a 7(a) loan ^[54]. A new building financed with the proceeds must conform to the National Earthquake Hazards Reduction Program recommended provisions ^[55], and the construction budget has to carry that.

Three ceilings cap the loan. No single 7(a) loan may exceed $5,000,000 ^[56]. Above $150,000 the SBA guarantees no more than 75 percent of the loan ^[57]. SBA guaranteed portions to one borrower and its affiliates may not exceed $3,750,000 unless a statute authorizes more for a specific program ^[58]. At the maximum and the full guaranty the guaranteed portion lands exactly on that limit, so this borrower could take no second guaranteed loan.

The guaranty fee is a real line in the cost table, and the case assumes the ceiling: section 120.220(a)(1)(iii) caps the fee on a loan of more than 12 months at 3.5 percent of the guaranteed portion once the loan exceeds $700,000 ^[59]. The statute adds 0.25 percent only on the guaranteed share above one million dollars ^[60], and the borrower may pay the fee out of proceeds ^[61]. Table 4 shows the fee. The fiscal 2027 fee notice was not read, so the fee may be lower.

Interest rules decide the debt service. Pricing is variable, set off the prime rate or the Optional Peg Rate ^[62], with a ceiling of the base rate plus three points above $350,000 ^[63]. The model's prime rate is the 7.00 percent bank prime loan rate for early November 2026 ^[64]. The example assumes a spread of 2.75 points, which makes a 9.75 percent note rate that stays variable.

The rule that sets the coverage test needs care. Section 120.150 asks that a loan be sound enough to reasonably assure repayment ^[65], and lets lenders weigh earnings or cash flow and any equity or collateral without stating a numeric coverage minimum ^[66]. The number comes from two places. One is the site's own SBA program page, which puts the standard 7(a) floor at 1.15x business coverage under SOP 50 10 8.1, reached within two years of funding for a startup ^[67]. This example never opened the SOP itself, so the floor rests on that page alone. The other is the lender's policy, which the case sets at an assumed 1.25x. The assumed 1.25x lender minimum is above the 1.15x floor, so the lender's minimum binds, and the debt table prints all three numbers.

Decision. The study would test coverage against the binding minimum and print the floor beside it, because the lender's number is the one that decides credit approval.

SBA Lending Record for This Asset Class in Texas

Loan Analytics keeps a loan-outcomes dataset built from the SBA's own loan-level 7(a) and 504 files ^[68]. For this example's state and asset class it covers SBA loans approved in fiscal 2017 to 2026 to businesses coded to car wash, with the project in Texas. The figures are the SBA program's record in the state, not Loan Analytics' work and not this hypothetical project. The dataset notes a limit on the class: car and truck washes, including mobile washes, share one code.

Project Cost, Sources and Uses

Cost builds from the land to the working capital in Table 6, in the order a lender would audit it: land at an assumed $1,300,000; site work at an assumed $1,000,000; a building of an assumed 5,600 square feet at an assumed $320 a square foot; a canopy of an assumed 4,000 square feet at an assumed $95; tunnel, water reclaim and vacuum equipment at an assumed $1,350,000; pay stations, plate readers and finishing tools at an assumed $200,000; and soft costs of an assumed $320,000. A construction contingency of 5 percent is assumed on site work, building and canopy. Interest during construction at an assumed $280,000, closing and financing at an assumed $120,000, and pre-opening costs and working capital at an assumed $300,000 complete the build. None of these has a published anchor, and the inputs table says so line by line.

One anchor exists for the building. Rider Levett Bucknall's third-quarter 2026 indicative hard construction costs for Austin are $200 to $265 per square foot for strip retail and $210 to $345 for a shopping center ^[69]. The assumed $320 sits above the strip retail range and inside the shopping center range, because a tunnel carries trenches, reclaim pits, doors and heavy plumbing that a retail shell lacks. Rider Levett Bucknall's cost index for Austin rose 4.36 percent from July 2025 to July 2026 ^[70], so a bid taken a year from now should come in higher, not lower.

The table also shows how the request is set. Loan to cost at the assumed 80 percent would be $5,891,028, above the program maximum, and the sponsor's pro forma would carry $7,557,453 at the assumed 1.25x lender minimum, further above it. The request is the smallest of the three, the $5,000,000 maximum, and the sponsor funds the rest: $2,338,725, which is 31.9 percent of total project cost and inside the assumed sponsor equity cap of 35 percent. The cap is this series' own rule for whether a sponsor brings a concept forward, not a program requirement. In the SBA loan record for Texas car washes, shown in Table 5, the median 7(a) loan sits well under the maximum, so a request at the maximum is at the upper end of what the program approves there.

Cost can be checked against published ranges, and the check is uncomfortable. A September 2023 Matthews piece puts the typical development cost of an express car wash between $3 million and $5 million, with costs on the rise ^[71]. Land, hard and soft cost in this project is $6,500,600, which is 130.0 percent of the high end of that range. The flex lobby, the canopy and the finishing equipment explain part of the gap, and three years of rising costs explain more. Table 7 prints the comparison.

The inputs table follows so a reader can see every number and its basis.

Rounded to the dollar; lines may not foot by $1.

Decision. The study would take the maximum as the sponsor's ask, price the building from a contractor's bid instead of a range, and treat the 130 percent comparison with the broker's range as a prompt to scrub the scope.

The Pro Forma: Revenue Build, Ramp and Operating Statement

Members are the larger revenue line, so the build starts there. Table 9 prints both columns. The base case assumes 2,600 average paying members at $28.00 a month, for $873,600 of membership revenue a year. Members are assumed to be 70 percent of exterior wash revenue, so retail exterior washes add $374,400 and exterior wash revenue is $1,248,000. The interior line adds 16,380 finishing services a year at an assumed $30.00 ticket, or $491,400, which is 28.3 percent of the $1,739,400 total. The site would wash about 132,600 vehicles a year, or 364 a day, counting an assumed 3.5 member visits a month and an assumed $16.00 retail ticket used only for that car count.

The sponsor's pro forma differs in four inputs and only four. It uses 4,144 members, the listed operator's figure per location, at $30.31, the upper bound that operator's filing implies, with members at the 71 percent Rinsed share and a wage of $15.00. O*NET OnLine, using Bureau of Labor Statistics 2025 wage data, reports a median of $15.00 an hour for cleaners of vehicles and equipment in the Austin-Round Rock-San Marcos metro ^[79], with a 75th percentile of $17.86 against $14.16 for Texas and $17.23 nationally ^[73]. Those four inputs lift revenue to $2,614,486 and net operating income to $1,131,535.

The base case gives a reason for each departure. Members are an assumed 2,600 rather than 4,144 because the site is new and independent, because Matthews reports that 87 percent of conveyor washes have a competitor within three miles ^[11], and because Rinsed's conversion bands tie members to scale. The price is an assumed $28.00 rather than $30.31 because AMP, via Matthews, found that two thirds of new members arrive on a discount ^[30]. The membership share is 70 rather than 71 percent because a flex site draws pay-per-visit interior customers, and the assumed wage is $16.50 rather than $15.00 because a growing metro tends to pay above its median.

Table 10 prints the operating statement, and labor is the line that moves most. Labor with payroll costs is $613,485 in the base case, 35.3 percent of revenue, against 21.6 percent in the sponsor's pro forma. Matthews ties the highest-valued washes to automation that holds labor under fifteen to twenty percent of revenue ^[78]. Neither column meets that, and the base case is far above it. The cause is the interior crew. At an assumed 1.00 labor hours per interior service, an assumed $16.50 wage and assumed payroll costs of 15 percent on top, the interior crew's pay is 63.2 percent of the interior revenue it brings in. Matthews ties that kind of labor load to full service ^[5], and Mister Car Wash, Inc. is converting some interior sites to the express format ^[18].

Other lines are judgement, each labelled in the inputs table: supplies at an assumed 6.5 percent of revenue, utilities at an assumed 6.0 percent, repairs at an assumed 4.0 percent, card processing at an assumed 3.0 percent, marketing at an assumed 2.5 percent, a management charge of an assumed 3.5 percent and a replacement reserve of an assumed 3.0 percent, the last two because a lender underwrites both whether or not the borrower runs the site. Earnings before management and reserve are 32.8 percent of revenue in the base case and 49.8 percent in the sponsor's pro forma, and net operating income margins are 26.3 percent and 43.3 percent.

The sponsor's 49.8 percent sits inside the benchmark of forty to fifty percent that Matthews gives for premium pricing ^[77] and under the 52.2 percent upper bound for the listed operator's store contribution before all rent and depreciation. The base case reaches its lower margin through lower revenue per site, a heavier interior crew, and a management charge and reserve that a chain's store-level figures leave out.

The ramp worries a lender most. Table 11 assumes 50 percent of stabilized volume in year 1 and 80 percent in year 2. Year 1 coverage is -0.02x, year 2 is 0.45x, and year 3, at stabilization, is 0.76x. Per the program page on the site, a startup has two years from funding to reach the 1.15x floor ^[67], and the base case misses that test. The pre-opening and working capital line falls $636,425 short of the first two years' cash shortfalls.

Decision. The study would underwrite on the base case with the ramp shown, and would present the sponsor's pro forma as an upside that depends on a member count the site has not yet earned.

Debt Coverage Under the Convention, and Sensitivity

The debt table tests the base case against the minimum that binds. Table 12 prints a $5,000,000 loan at the 9.75 percent variable note rate, with $3,715,385 on the real estate term and $1,284,615 on the ten-year term. Annual debt service is $598,898 and the loan constant is 11.98 percent. Set against that, the base case earns $457,186 for coverage of 0.76x, and the sponsor's pro forma earns enough for 1.89x.

Both minimums are printed. The floor is the 1.15x on the site's own SBA program page ^[67], which this example reads without opening the SOP behind it; the lender minimum is the assumed 1.25x. The larger of the two sets the binding minimum, and that is the lender's. The base case falls $291,436 of net operating income short of it, while the sponsor's pro forma clears it by $382,913.

This series measures equity at the loan the earnings support, with the fee recomputed on that loan. The base case supports a loan of $3,053,519 at the binding minimum; the fee on that loan is $83,380, total project cost at that loan is $7,283,980, and the equity at that loan is $4,230,461, which is 58.1 percent of total project cost.

The value lens points the same way. At Matthews's 8 to 10 times EBITDA for good single express sites with the real estate included ^[19], applied to net operating income after reserves, the base case is worth $3,657,490 at 8.0 times and $4,571,863 at 10.0 times. The $5,000,000 loan is 136.7 percent of the lower value and 109.4 percent of the higher, and value at 10.0 times is 62.3 percent of total project cost. The sponsor's pro forma gives 55.2 and 44.2 percent at the same multiples, which is how identical buildings lead to opposite credit decisions.

The sensitivity table stresses a base case that already fails. Table 13 shows 0.61x with revenue down 10 percent, 0.45x with revenue down 20 percent, 0.67x with the rate up 2 points and 0.55x with operating expenses up 10 percent. With interior finishing services down 25 percent the coverage is 0.75x, almost the base case's 0.76x. That result deserves a pause: removing a quarter of the interior business barely moves coverage, so the finishing lanes add revenue and almost no income at an assumed $30.00 ticket and an assumed 1.00 labor hours a service.

Break-even runs the other way and asks what must be true to reach each line. Table 14 shows that volume must reach 115.2 percent of the base case for 1.00x, 124.8 percent for the 1.15x program floor and 131.2 percent for the binding minimum. In members that is 2,995, 3,245 and 3,412. Holding volume at the base, the membership price per month would need to be $32.45, $35.27 and $37.14, or the interior ticket $42.10, $49.77 and $54.88. The price route looks implausible when two thirds of new members arrive on a discount, as AMP found via Matthews ^[30], so the member route is the one that matters.

Decision. The base case stands as a failure of both the binding minimum and the program floor, and no input moves to change that, because the inputs were fixed before the result.

What Would Change the Answer, and the Restructure

Three things change the answer. The first is paying members: a site with 3,412 members at an assumed $28.00 meets the binding minimum, and a site with 2,600 members would need $37.14. The study would test the estimate against a trade-area count of competing tunnels, which this example could not read.

The second is the interior economics, because the finishing lanes add revenue and almost no income. The International Carwash Association article frames the open question as whether the operation can deliver interior service consistently, efficiently and profitably, and says many customers want it ^[80]. The third is the debt: the program maximum at a variable 9.75 percent carries a debt service the base case cannot meet, and a smaller loan changes that arithmetic directly.

The restructure. The model computes a smaller 7(a) loan with added equity. The supported loan of $3,053,519 rounds down to a restructured loan of $3,050,000. The fee recomputed on that loan is $83,281 and total project cost at the restructured loan is $7,283,881. Equity at the restructured loan is $4,233,881, which is 58.1 percent of total project cost and $1,895,156 more than the sponsor puts in at the request. Annual debt service falls to $365,327 and coverage reaches the assumed 1.25x. Both tests are met: coverage of 1.25x equals the assumed lender minimum, which binds, and is above the floor the site's own SBA program page gives ^[67]. Table 15 prints each line.

The restructure is arithmetically complete and practically a different deal. Its equity share of 58.1 percent is well past the 35 percent of project cost this example assumes a sponsor can supply, so this sponsor cannot make the project work by adding the equity the base case demands. Three responses remain: prove the member figure with evidence the study can verify; move to a site with fewer competing tunnels; or build a smaller format, an express tunnel without the four finishing lanes, which is a separate study and is not computed here. The restructured loan sits between the median and the 75th percentile of the 7(a) record for this class in Texas, so the smaller request is also an ordinary one for the state, which the $5,000,000 request is not.

Decision. The study would advise against building the full flex format on these inputs, state the restructure's equity as the price of proceeding, and name an express-first format as the next concept to test.

Questions to Ask a Feasibility Study Company Before a Car Wash Loan

Why does the sponsor's pro forma show 1.89x and the base case 0.76x?

They share the cost basis, the interior volume and price, the crew sizes, the expense ratios, the rate and the terms. Four market inputs differ: 4,144 members against an assumed 2,600, $30.31 against an assumed $28.00, a 71 against an assumed 70 percent membership share, and a $15.00 against an assumed $16.50 wage. The member input accounts for most of the gap.

Can one 7(a) loan finance the land, the building, the equipment and the working capital?

Yes, up to the program maximum. The rules allow proceeds for land and site improvement ^[49], new buildings and fixed assets ^[50] and working capital ^[51], and the guaranty fee can come out of proceeds ^[61].

Does the 1.15x floor or the 1.25x assumption decide the loan?

Both minimums matter here. The lender's assumed 1.25x sits above the 1.15x that the site's own SBA program page gives for a standard 7(a) loan ^[67], so the lender's minimum binds.

What should I ask a feasibility consultant before hiring one for a car wash?

Ask which public sources the member count rests on, and how the consultant treats a chain's filing as an upper bound for a single site. Ask to see the base case beside the sponsor's figures with every difference explained, and whether the interior crew's labor is modelled apart from the exterior crew. Ask what happens when the base case fails: a credible answer is a restructure with its own coverage and equity, not a quietly revised assumption.