SBA 7(a) Car Wash Feasibility Study in Pennsylvania

Pennsylvania car washes: wide loans and heavy cancellation

Pennsylvania ranks 9 among states in 7(a) car wash lending, but car washes stand only 15 of 39 in the Pennsylvania class ranking. SBA approved 87 loans from FY2017 to FY2026, totalling $102.1 million. Two features distinguish this cell. The first is dispersion: the median is $450,000, yet the central half runs from $40,000 all the way up to $2.3 million, a ratio of 0.57x at the median against the nationwide 7(a) midpoint but a very long upper tail. The second is cancellation, at a floor of 21.6% and a ceiling of 23.0%. Franchising is limited to 5.7% of loans.

Pennsylvania holders and counties

Very small notes characterise TD Bank, National Association, which holds 8 loans totalling just $246,400. The Huntington National Bank holds 7 worth $2.3 million and KeyBank National Association 6 worth $1.4 million, while First Commonwealth Bank holds only 5 yet $18.1 million, so its average is enormous. Those are holders as SBA lists them now. Allegheny and Montgomery counties each have 12 loans, Philadelphia 9 and Chester 8. Annual dollars are extremely irregular: $22.7 million in FY2021 and $25.9 million in FY2022, then a mere $120,000 in FY2023.

A withheld charge-off rate

Pennsylvania's early-cohort loss rate is not printed: the funded group was too small to support one. Withholding is not the same as a zero, and nothing about the loss experience should be inferred from the absence.

What a Pennsylvania car wash study has to test

The width of the range is a warning that the pool holds very different projects: an equipment loan for a small site and a large tunnel build can both appear. The study must therefore describe its own scope and cost. Because stationary, truck and mobile operations all share the code, a proposal that is a tunnel should not rely on averages drawn from all three. Demand testing means counting traffic past the site, the existing automatic washes around it and the likely membership base, with allowance for winter months when road salt boosts washing but freezing temperatures can close an exterior bay. The cancellation floor says projects fall away before funding, so entitlements, stormwater and utility approvals need to be documented. Costs must separate land, building and equipment, and cash flow should carry the payment through a slow first year. A loan toward the top of the central range needs comparable evidence of throughput.