SBA 7(a) Car Wash Feasibility Study in Illinois

Illinois washes: Cook County and the rest

Car wash lending in Illinois under SBA 7(a) is concentrated in one county. Cook has 49 of the 83 loans approved from FY2017 to FY2026, followed by Lake with 11, DuPage with 5, McHenry with 4, Kane and Will with 3 each, and Lee with 2. Total approvals come to $133.7 million. Illinois stands 10th among states by count, though car wash is only 15th of 39 classes in the state. The median of $771,500 is 0.98x the national reading, so loans track the norm, but the central half is very wide, from $247,000 to $2.8 million.

A wide range of projects

That spread is the feature that distinguishes the cell. A $247,000 loan and a $2.8 million loan are different projects, probably a small existing wash and a new tunnel, and a study has to say which one it addresses. Franchising is a small factor, at 6.0% of loans. Twelve loans sit with each of Byline Bank and The Huntington National Bank, yet Byline's $24.6 million dwarfs Huntington's $7.4 million. U.S. Bank, National Association has 9 for $4.1 million, and 7 loans each sit with Celtic Bank Corporation ($27.5 million) and Millennium Bank ($10.3 million). Celtic's average ticket is the largest on the list.

Floors

Illinois cancellations after approval start at 8.2% and top out at 9.8%. For Illinois washes, 33 early loans funded and 0.00% have been charged off on either basis, a floor drawn from a small cohort. Volume was 9 loans and $15.2 million in FY2017, 9 and $15.4 million in FY2021, and 10 and $11.9 million in FY2026, a steady pace with falling dollars.

What the Illinois study should test

Winter is the central issue in an Illinois wash. The study should model the weather: how many days a year are usable for an exterior wash, how an in-bay or tunnel format holds up in freezing months, and whether membership plans keep revenue steady through them. It should also test the traffic on the road frontage, competing washes within a short drive, water, sewer and reclaim costs, and equipment against the loan the project requires. A lender will compare the proposed ticket with the median near $771,500 and ask why it differs. The appraisal covers real estate and the operating business. On coding, SBA places tunnel, self-serve, mobile and truck washes together, so formats cannot be told apart in these totals.