SBA 504 Car Wash Feasibility Study in Michigan

Michigan Certified Development Corporation leads

Michigan's SBA 504 car wash record is notable for one holder. Of the 27 loans, 20 sit with Michigan Certified Development Corporation ($11.3 million); Great Lakes Commercial Finance has 6 ($7.3 million). Those are present-holder entries and not statements about practice. The state is 9 among states by loan count, and car washes take 8 of 39 places among Michigan classes. SBA approved $19.8 million over FY2017 to FY2026, and the median of $469,000 is only 0.43x the nationwide 504 level, with ordinary loans from $253,500 to $1.3 million.

Detroit area and west Michigan

Macomb and Wayne counties have 5 loans each; Kalamazoo, Kent, Muskegon and Oakland have 3 each; Barry, Emmet, Genesee and Grand Traverse have 1 each. Franchise share is 7.4%. FY2019 brought 6 loans and $2.5 million, FY2021 brought 5 loans and $4.2 million, and FY2024 brought 5 loans with $5.3 million, the largest dollar year. The last two years are slim, with 1 loan of $260,000 in FY2025 and 1 loan of $180,000 in FY2026.

Gaps and coding

Cancellation and charge-off percentages are not shown, because the cohort is too small. Because one code covers passenger, truck and mobile washing alike, the figures mix fixed sites with mobile units; a Michigan project that is purely a truck wash will find only a rough guide here.

The study behind a Michigan wash

A 504 loan funds the site and building, so the first test is the property: zoning, tunnel length, queueing room on the lot, drainage and discharge rules. Next is volume: cars passing, residential density and the other washes within a short drive, with seasonal swings that reflect Michigan winters and the salt that sends drivers to washes. Membership revenue should be tested for churn, and chemical, water and power costs should be estimated. Because loans in the record are modest next to the national class, the study should justify why the proposed equipment package suits the site. Cash flow has to meet the payment through a slow opening, and the appraiser should split bricks and land from the operating business. Michigan's long winters make a heated, enclosed tunnel and dependable drying a real cost, and the study should show that revenue in cold months still carries the payment. Utility quotes for water and power should be included.