SBA 7(a) Car Wash Feasibility Study in Colorado

Independent washes with low cancellations

Colorado car washes took 78 SBA 7(a) loans worth $91.3 million in gross dollars. The state stands 11th for the pairing, while washes are the 14 of 39 class at home. No franchise stands behind any of them: the share is 0.00%, so these are independent operators. The median loan of $568,500 is 0.72x the national median, and the bulk of the loans range from $150,000 to $1.7 million. Cancellations touched at least 4.8% of approvals with a matching ceiling, a low number that a lender may find reassuring.

Midwest Regional Bank holds 7 loans. Three names tie at 5: The Bancorp Bank, UMB Bank and Wells Fargo. Nothing in these holder counts speaks to any bank's credit judgment. Jefferson County has 13 loans and Adams 10, followed by Arapahoe and Weld with 8 each, Douglas with 7 and El Paso with 6. Suburban and neighboring counties therefore dominate. Volume rose to 12 loans and $23.5 million in FY2020 and 13 loans and $26.0 million in FY2021, then slid to 6 loans and $1.1 million in FY2024.

Floors for losses

In the funded cohort of 42 loans from FY2017 to FY2021, at least 2.4% have been charged off to date, and 2.4% within five years of approval. Loans still open may add to both. Our distinctness margin did not isolate any loss or cancellation measure against Colorado as a whole or car washes nationally, so the cell reads as ordinary on outcomes. The lean cancellation floor and the independent ownership are what a reader should take from it.

Coding limits and what a Colorado study must prove

Car washes and truck washes, mobile ones included, share a single code, so the figures cannot tell an exterior tunnel from a self-serve bay or a mobile unit. A Colorado study should name the format: tunnel, in-bay automatic, self-serve, or a mix. It should test traffic counts and visibility, competing washes within the trade area, local water rates and wastewater rules, and weather, because winter cold and storms cut volume. Membership programs change revenue, so the model should show retention. Land and equipment costs need an itemized budget, and coverage must hold in a poor-weather year. An appraisal of a car wash values real estate and equipment separately from the business.