SBA 504 Car Wash Feasibility Study in Texas

Texas car washes under the 504 program

Texas ranks 3 among states for SBA 504 car wash loans, with 94 approved between FY2017 and FY2026 for $125.8 million, yet inside Texas the class is placed 5 of 39. Under 504 a project is financed in two parts: a bank takes a first lien and a certified development company funds a debenture behind it, with the owner adding equity. The median loan is $1.3 million, which works out to 1.15x the nationwide 504 benchmark, with an interquartile range of $925,000 to $1.7 million. Branded franchises account for 7.4% of the book.

Development companies holding the debentures

Capital Certified Development Corporation holds 34 loans, worth $48.3 million. LiftFund, Inc. holds 26 worth $36.8 million, North Texas Certified Development Corporation 13 worth $15.8 million, Greater East Texas Certified Development Company 7 worth $11.7 million, and Community Certified Development Corporation 6 worth $7.0 million. Harris County leads the map with 24 loans, ahead of Bexar with 10, Dallas and Fort Bend with 8 each, and Collin with 7. Dollars grew through the series, reaching $25.4 million on 15 loans in FY2024 and $19.7 million on 13 loans in FY2025, before FY2026 at 3 loans and $3.5 million.

The visible risk is cancellation, where at least 16.7% of Texas car wash loans approved in FY2017 through FY2024 did not fund, climbing to 26.9% if every undisbursed loan is counted. Among 35 funded loans from the earlier cohort, the write-off floor is 2.9% both to date and within five years. Open loans can still change those minimums.

Testing a Texas wash request

SBA's code puts car and truck washes, mobile washes included, into one class, so the record blends different wash formats. A Texas study must name the format and test it. Tunnel economics depend on traffic counts, site visibility, queue length and membership revenue, while water, chemicals and utilities drive cost. The study should price the land, building and equipment separately, since equipment ages faster than the property, and show that payments are covered even if memberships grow slowly. Competing washes within a short drive and wastewater permits belong in the analysis. For the first lien and debenture, the appraisal should speak to both land value and the going concern.