SBA 7(a) Car Wash Feasibility Study in Minnesota

Low-priced loans in a mid-table state

In Minnesota, 7(a) lending to car washes comes in small. A median of $332,000 is just 0.42x the nationwide figure, with typical loans from $198,000 to $885,000. The FY2017 to FY2026 tally is 37 approvals and $34.3 million, a dollar total lifted by a few larger projects. Minnesota is 19 among states for the class, and car washes hold 21 of 39 places among Minnesota's classes. Franchises appear on 8.1% of loans. A modest median points toward smaller sites rather than large tunnels.

A brief peak in FY2021

The record is lumpy. FY2020 shows 0 loans and $0, then FY2021 shows 9 loans and $13.8 million, the clear peak. FY2023 had 7 loans and $6.4 million, FY2024 had 5 loans and $5.8 million, and the last two years show 2 loans each, at $620,000 and $759,900. Anoka County has 7 loans and Hennepin 6, with Scott and Wadena 3 each. Blue Earth, Redwood, Sherburne and Wright have 2, and Carver and Crow Wing 1. Old National Bank is the lone lender listed: 5 loans, $9.1 million, SBA's current-holder entry, and an average well above the median.

Cancellation spread and coding

Cancellation reaches at least 6.1% across Minnesota wash approvals to FY2024, and the ceiling, which also counts undisbursed loans, is 9.1%. The gap implies that a few approvals had not yet funded at the snapshot. No charge-off rate is shown, because too few of the early loans funded. Because one code takes in passenger, truck and mobile washing, the numbers blend fixed sites and mobile operators.

What a Minnesota wash study must test

Weather is the first test. A study should show cars per day by month, with the winter months for a cold state distinct from summer, and should explain how the site handles freezing in the tunnel, the dryer and the vacuum bays. Traffic counts, nearby retail and housing, and competing washes within a short drive support the volume. Memberships should be tested for churn. Capital cost covers equipment, water treatment and the lot, and these must be compared with a loan in the range seen here. Local rules on discharge and water use can change the budget. The payment must be covered by the weakest quarter, and an appraiser should separate land and building from the business value.