SBA 7(a) Car Wash Feasibility Study in California

Million-dollar washes

A California car wash financed through SBA 7(a) is a large undertaking. Median approval: $1.4 million, which is 1.75x the nationwide 7(a) median for washes and the measure that sets the cell apart. Half of the loans lie between $358,000 and $3.0 million. Across FY2017 to FY2026 the program approved 406 California wash loans for $737.9 million, giving the state first place by count, while washes sit 15 of 39 among California asset classes. Only 2.2% of loans went to franchise brands.

Lenders by loans held

Dollar totals tell the story of ticket size. 23 loans sit with PCB Bank for $56.3 million, 21 with Celtic Bank Corporation for $63.7 million, 20 with Bank of Hope for $44.7 million and 20 with Open Bank for $38.5 million, while U.S. Bank, National Association has the highest count at 40 loans yet only $8.7 million. SBA's field records the current holder, not any policy toward washes. Los Angeles County has 128 loans, San Diego 42, Orange 37, San Bernardino 36 and Riverside 32.

Outcomes and the cycle

Cancellation reached 11.0% of approvals through FY2024 at the least, and 11.3% if undisbursed loans are included. Among 225 washes in the oldest funded cohort, the share charged off so far is at least 2.2%, and 0.89% inside five years of approval; open loans can raise both. Volume peaked at 64 loans and $126.1 million in FY2021, slid to 25 loans and $34.1 million in FY2023, and stands at 22 loans in FY2026. A shift like that calls for care before projecting growth.

California car wash: what a study tests

Truck washes and mobile units are filed with ordinary car washes under a single code, so some of these loans fund truck or mobile operations. A study for a tunnel should test traffic counts and visibility, queue space on busy days, water recycling and discharge rules. Membership revenue should be modelled with a churn assumption and a rate competitors cannot easily undercut. On a loan near $1.4 million, site control, entitlement timing and an equipment quote belong in the budget, and the appraiser will separate real estate from the going concern.